Focused on building reliable datasets, financial models, and research tools for value-minded investors. Committed to turning complex data into practical guidance for value-investing and long-term wealth.
Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Far East Hotels & Entertainment's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was -2.39%.
As of today (2026-09-03), Far East Hotels & Entertainment's WACC % is 8.50%. Far East Hotels & Entertainment's ROC % is -3.21% (calculated using TTM income statement data).
Far East Hotels & Entertainment earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Far East Hotels & Entertainment (HKSE:00037) 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, Far East Hotels & Entertainment's WACC % is 8.50%. Far East Hotels & Entertainment's ROC % is -3.21% (calculated using TTM income statement data).
Far East Hotels & Entertainment 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.
Far East Hotels & Entertainment ROC % Related Terms
Far East Hotels & Entertainment ROC % 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.
Note:
The Operating Income data used here is two times the semi-annual (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
Far East Hotels & Entertainment (HKSE:00037) has a ROC % of -2.39% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Far East Hotels & Entertainment and its competitors.
Is Far East Hotels & Entertainment's ROC % too high?
Far East Hotels & Entertainment's current ROC % is -2.39%. Overall, Far East Hotels & Entertainment has a GF Score™ of 36/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Far East Hotels & Entertainment's ROC % compare to CBRE and BEKE?
Far East Hotels & Entertainment's ROC % of -2.39% can be compared against companies in the Real Estate industry. The industry median ROC % is 2.08. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Real Estate company?
The median ROC % among Real Estate companies is 2.08, based on 1,759 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Far East Hotels & Entertainment and its competitors. For the Real Estate industry, the median ROC % is 2.08 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Far East Hotels & Entertainment's current ROC % is -2.39%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Far East Hotels & Entertainment stock overvalued right now?
Based on GuruFocus' analysis, Far East Hotels & Entertainment (HKSE:00037) is currently considered Modestly Overvalued. The stock's GF Value™ is HK$0.38, compared to a current price of HK$0.50 — trading 30.3% above its estimated fair value. The current ROC % is -2.39%. Far East Hotels & Entertainment's overall GF Score™ is 36/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Far East Hotels & Entertainment (HKSE:00037), the current ROC % is -2.39% as of Mar. 2026. 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 Far East Hotels & Entertainment (HKSE:00037) Overvalued in 2026?
Based on GuruFocus' analysis, Far East Hotels & Entertainment stock appears to be overvalued.
The current stock price of HK$0.50 is trading 30.3% above its estimated GF Value™ of HK$0.38.
GuruFocus considers Far East Hotels & Entertainment to be Modestly Overvalued.
Key valuation signals for HKSE:00037:
ROC %: -2.39%
GF Value™: HK$0.38 vs. price of HK$0.50 (30.3% above fair value)
No single metric tells the full story. See the HKSE:00037 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Far East Hotels & Entertainment Ltd is a Hong Kong-based investment holding company. Through its subsidiaries, the company operates in the following reportable segments: Hotel operation in Hong Kong, Property investment in Hong Kong, Property investment overseas, and Securities investment and trading. The majority of the group's revenue is generated from the Hotel operation in Hong Kong segment, which operates the Cheung Chau Warwick Hotel in Hong Kong. Geographically, it generates maximum revenue from Hong Kong, and the rest from overseas markets.
36GF Score
Get the complete analysis for HKSE:00037
ROC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
HKSE:00037 has been successfully added to your 
