HKHGF (Hongkong Land Holdings) ROC % : 1.27% (As of Jun. 2024)

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What is Hongkong Land Holdings ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Hongkong Land Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 1.27%.

As of today (2024-12-12), Hongkong Land Holdings's WACC % is 5.25%. Hongkong Land Holdings's ROC % is 1.93% (calculated using TTM income statement data). Hongkong Land Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Hongkong Land Holdings ROC % Historical Data

The historical data trend for Hongkong Land Holdings's ROC % 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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Hongkong Land Holdings ROC % Chart

Hongkong Land Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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1.20

2.44

5.23

1.32

2.57

Hongkong Land Holdings Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															1.69	13.83	2.22	3.15	1.27

Hongkong Land Holdings ROC % Calculation

Hongkong Land Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	763.4 * ( 1 - -29.89% )	/	( (39427.5	+	37676.6)	/ 2 )
=	991.58026	/	38552.05
=	2.57 %

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	))
=	42596.8	-	1995.9	-	( 1173.4	-	max(0, 2415	-	4686	+	1173.4	))
=	39427.5

	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	))
=	40767.9	-	1895.7	-	( 1195.6	-	max(0, 2677.3	-	4556.2	+	1195.6	))
=	37676.6

Hongkong Land Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	428.2 * ( 1 - -9.56% )	/	( (37676.6	+	36176.3)	/ 2 )
=	469.13592	/	36926.45
=	1.27 %

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	))
=	40767.9	-	1895.7	-	( 1195.6	-	max(0, 2677.3	-	4556.2	+	1195.6	))
=	37676.6

	Invested Capital		(Q: Jun. 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	))
=	38799.8	-	1554.6	-	( 1068.9	-	max(0, 2232.1	-	3876.1	+	1068.9	))
=	36176.3

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

Hongkong Land Holdings (OTCPK:HKHGF) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, Hongkong Land Holdings's WACC % is 5.25%. Hongkong Land Holdings's ROC % is 1.93% (calculated using TTM income statement data). Hongkong Land Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % 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.

Hongkong Land Holdings ROC % Related Terms

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Hongkong Land Holdings Business Description

Industry

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Traded in Other Exchanges

HNGKY:USA H78:Singapore HKLD:UK HLH:Germany

Address

33-35 Street, Jardine House, 4th Floor, Hamilton, BMU

Website

https://www.hkland.com

Hongkong Land is a property investor focusing on holding prime commercial assets in Hong Kong, mainland China and Singapore. It is the largest office landlord in Hong Kong's Central Business District, and the second largest in Hong Kong overall. The Central portfolio includes 4.1 million square feet of office space and 0.5 million square feet of retail space. The company also holds 1.6 million square feet of office space in Singapore. The company also has property development business in mainland China, Singapore, and Southeast Asia. Hongkong Land is dual listed on the London Stock Exchange and the Singapore Exchange. Jardine Matheson Holdings owns 53% of the company.