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Hongcheng Environmental Technology Co (HKSE:02265) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is two times the semi-annual (Dec. 2025) net income data. The Revenue data used here is two times the semi-annual (Dec. 2025) revenue data.
* 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.
Be Aware
Like ROE, ROA % is calculated with only 12 months 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. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Hongcheng Environmental Technology Co ROA % Related Terms
Hongcheng Environmental Technology Co ROA % Historical Data
* 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.
For the Waste Management subindustry, Hongcheng Environmental Technology Co's ROA %, along with its competitors' market caps and ROA % 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.
Hongcheng Environmental Technology Co ROA % vs Waste Management Industry
* 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.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is two times the semi-annual (Dec. 2025) net income data.
ROA % is displayed in the 30-year financial page.
Hongcheng Environmental Technology Co (HKSE:02265) has a ROA % of 9.94% as of Dec. 2025. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Hongcheng Environmental Technology Co and its competitors. This is near median its historical median of 10.50. Over the past decade, Hongcheng Environmental Technology Co's ROA % has ranged from 2.23 to 16.44. According to the industry distribution chart, Hongcheng Environmental Technology Co ranks #31 out of 247 companies in the Waste Management industry, placing it in the top 12.6%.
Is Hongcheng Environmental Technology Co's ROA % too high?
Hongcheng Environmental Technology Co's current ROA % of 9.94% is near median its 10-year median of 10.50. Over the past 10 years, this metric has ranged from a low of 2.23 to a high of 16.44. The Waste Management industry median ROA % is 1.96. Hongcheng Environmental Technology Co's value of 9.94% is 407.1% above this industry median. Based on the distribution chart, Hongcheng Environmental Technology Co ranks #31 out of 247 companies in the Waste Management industry, which is in the top quartile — a strong position relative to peers. Overall, Hongcheng Environmental Technology Co has a GF Score™ of 80/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Hongcheng Environmental Technology Co's ROA % compare to WM and RSG?
According to the Waste Management industry distribution chart, Hongcheng Environmental Technology Co ranks #31 out of 247 companies for ROA %. This places Hongcheng Environmental Technology Co in the top 13% of its industry — outperforming the majority of peers. The industry median ROA % is 1.96. Hongcheng Environmental Technology Co's value of 9.94% is 407.1% above this benchmark. Historically, Hongcheng Environmental Technology Co's own ROA % has ranged from 2.23 to 16.44 over the past decade. While the company's 10-year median is 10.50 vs. the industry median of 1.96, Hongcheng Environmental Technology Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROA % for a Waste Management company?
The median ROA % among Waste Management companies is 1.96, based on 247 companies in the industry. Companies in the top quartile (top 25%) have a ROA % significantly above this median, while those in the bottom quartile fall well below. However, ROA % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Hongcheng Environmental Technology Co's current ROA % of 9.94% is 407.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROA % mean?
A high ROA % can signal that a stock is expensive relative to its fundamentals. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Hongcheng Environmental Technology Co and its competitors. For the Waste Management industry, the median ROA % is 1.96 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Hongcheng Environmental Technology Co's current ROA % is 9.94%, which is near median its own 10-year median of 10.50. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Hongcheng Environmental Technology Co stock overvalued right now?
Based on GuruFocus' analysis, Hongcheng Environmental Technology Co (HKSE:02265) is currently considered Possible Value Trap. The stock's GF Value™ is HK$1.61, compared to a current price of HK$1.07 — trading 33.5% below its estimated fair value. The current ROA % is 9.94%, which is near median its 10-year median of 10.50 and 407.1% above the Waste Management industry median of 1.96. Hongcheng Environmental Technology Co's overall GF Score™ is 80/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROA % calculated?
ROA % is calculated from a company's financial statements. For Hongcheng Environmental Technology Co (HKSE:02265), the current ROA % is 9.94% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Hongcheng Environmental Technology Co (HKSE:02265) Overvalued in 2026?
Based on GuruFocus' analysis, Hongcheng Environmental Technology Co stock appears to be undervalued.
The current stock price of HK$1.07 is trading 33.5% below its estimated GF Value™ of HK$1.61.
GuruFocus considers Hongcheng Environmental Technology Co to be Possible Value Trap.
Key valuation signals for HKSE:02265:
ROA %: 9.94% (near median its 10-year median of 10.50)
GF Value™: HK$1.61 vs. price of HK$1.07 (33.5% below fair value)
Industry Position: 407.1% above the Waste Management median (#31 of 247)
No single metric tells the full story. See the HKSE:02265 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Hongcheng Environmental Technology Co Ltd is an investment holding company. It is engaged in (i) the provision of gold mine hazardous waste treatment services and sales of pyrite concentrate, and (ii) the production and sales of products from reprocessing of pyrite concentrate and sulphuric acid; and (iii) the production and sales of magnesium fertiliser in the PRC. It has two reportable segments: Hazardous waste treatment and recycling, and Reprocessing of pyrite concentrate and Production of magnesium fertiliser. Key revenue is generated from the hazardous waste treatment and recycling segment.
80GF Score
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