Lung Kee Group Holdings (HKSE:00255) ROC % : -3.15% (As of Jun. 2024)

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What is Lung Kee Group 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 %. Lung Kee Group Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -3.15%.

As of today (2024-12-13), Lung Kee Group Holdings's WACC % is 6.50%. Lung Kee Group Holdings's ROC % is -4.72% (calculated using TTM income statement data). Lung Kee Group Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Lung Kee Group Holdings ROC % Historical Data

The historical data trend for Lung Kee Group 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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Lung Kee Group Holdings ROC % Chart

Lung Kee Group Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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7.71

11.13

13.46

-0.06

-5.16

Lung Kee Group 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															4.45	-4.71	-4.26	-6.04	-3.15

Lung Kee Group Holdings ROC % Calculation

Lung Kee Group 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 )
=	-124.067 * ( 1 - 35.68% )	/	( (1592.467	+	1501.16)	/ 2 )
=	-79.7998944	/	1546.8135
=	-5.16 %

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	))
=	2301.477	-	172.367	-	( 536.643	-	max(0, 197.706	-	1294.068	+	536.643	))
=	1592.467

	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	))
=	2092.985	-	163.067	-	( 428.758	-	max(0, 193.305	-	1136.446	+	428.758	))
=	1501.16

Lung Kee Group 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 )
=	-52.18 * ( 1 - 13.84% )	/	( (1501.16	+	1349.117)	/ 2 )
=	-44.958288	/	1425.1385
=	-3.15 %

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	))
=	2092.985	-	163.067	-	( 428.758	-	max(0, 193.305	-	1136.446	+	428.758	))
=	1501.16

	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	))
=	1997.841	-	178.183	-	( 470.541	-	max(0, 198.403	-	1132.047	+	470.541	))
=	1349.117

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

Lung Kee Group Holdings (HKSE:00255) 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, Lung Kee Group Holdings's WACC % is 6.50%. Lung Kee Group Holdings's ROC % is -4.72% (calculated using TTM income statement data). Lung Kee Group 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.

Lung Kee Group Holdings ROC % Related Terms

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Lung Kee Group Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Lung Kee Group Holdings Ltd (HKSE:00255) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

No. 1 On Kwan Street, Unit A, 15th Floor, Kings Wing Plaza 2, Sha Tin, New Territories, Hong Kong, HKG

Website

https://www.lkm.com.cn

Lung Kee Group Holdings Ltd is an investment holding company that provides corporate management services. Along with its subsidiaries, it is engaged in the manufacturing and marketing of mould bases and related products. Its product offerings include standard and custom-made mould base, mould components, tool and steel products such as plastic and steel mould, hot and cold work steel, precision plates, standard mould inserts, and other materials. The company generates a majority of its revenue from the People's Republic of China and the rest from other markets like Asia, Europe, and America.

Executives

Siu Tit Lung	2103 Interests held jointly with another person
Siu Yuk Lung	2103 Interests held jointly with another person
Webb David Michael	2101 Beneficial owner

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