Shanghai Fortune Techgroup Co (SZSE:300493) ROIC % : 7.37% (As of Mar. 2024)

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What is Shanghai Fortune Techgroup Co ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Shanghai Fortune Techgroup Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 7.37%.

As of today (2024-05-19), Shanghai Fortune Techgroup Co's WACC % is 10.43%. Shanghai Fortune Techgroup Co's ROIC % is 7.79% (calculated using TTM income statement data). Shanghai Fortune Techgroup Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Shanghai Fortune Techgroup Co ROIC % Historical Data

The historical data trend for Shanghai Fortune Techgroup Co's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Shanghai Fortune Techgroup Co ROIC % Chart

Shanghai Fortune Techgroup Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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4.40

6.22

9.62

8.59

6.59

Shanghai Fortune Techgroup Co Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROIC %	Get a 7-Day Free Trial															3.28	9.08	6.51	21.02	7.37

Competitive Comparison of Shanghai Fortune Techgroup Co's ROIC %

For the Semiconductors subindustry, Shanghai Fortune Techgroup Co's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Shanghai Fortune Techgroup Co's ROIC % Distribution in the Semiconductors Industry

For the Semiconductors industry and Technology sector, Shanghai Fortune Techgroup Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Shanghai Fortune Techgroup Co's ROIC % falls into.

Shanghai Fortune Techgroup Co ROIC % Calculation

Shanghai Fortune Techgroup Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	77.05 * ( 1 - 15.41% )	/	( (1012.208	+	965.669)	/ 2 )
=	65.176595	/	988.9385
=	6.59 %

where

	Invested Capital		(A: Dec. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1593.215	-	365.298	-	( 215.709	-	max(0, 552.516	-	1356.117	+	215.709	))
=	1012.208

	Invested Capital		(A: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1628.381	-	404.631	-	( 258.081	-	max(0, 534.631	-	1383.341	+	258.081	))
=	965.669

Shanghai Fortune Techgroup Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROIC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	91.024 * ( 1 - 22.59% )	/	( (965.669	+	946.75)	/ 2 )
=	70.4616784	/	956.2095
=	7.37 %

where

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1628.381	-	404.631	-	( 258.081	-	max(0, 534.631	-	1383.341	+	258.081	))
=	965.669

	Invested Capital		(Q: Mar. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1695.715	-	438.807	-	( 310.158	-	max(0, 591.019	-	1425.747	+	310.158	))
=	946.75

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

Shanghai Fortune Techgroup Co (SZSE:300493) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Shanghai Fortune Techgroup Co's WACC % is 10.43%. Shanghai Fortune Techgroup Co's ROIC % is 7.79% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Shanghai Fortune Techgroup Co ROIC % Related Terms

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Shanghai Fortune Techgroup Co (SZSE:300493) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Shanghai Fortune Techgroup Co Ltd (SZSE:300493) » Definitions » ROIC %

Comparable Companies

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Address

No. 200, Tianlin Road, 3rd Floor, Room 301, Building A2, China Fortune Properties, Xuhui District, Shanghai, CHN, 200233

Website

http://www.fortune-co.com

Shanghai Fortune Techgroup Co Ltd is a provider of semiconductor chips and solutions for the telecommunication industry in China. The company products include wired and wireless communications, radio frequency and power amplifier type of components, sensors, and others. The company provides different solutions for smart home, smart cities, surveillance, and fingerprint identification applications.

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