China Huajun Group (HKSE:00377) ROC % : -2.42% (As of Dec. 2023)

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What is China Huajun Group 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 %. China Huajun Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -2.42%.

As of today (2024-05-14), China Huajun Group's WACC % is 13.89%. China Huajun Group's ROC % is -1.35% (calculated using TTM income statement data). China Huajun Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China Huajun Group ROC % Historical Data

The historical data trend for China Huajun Group'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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China Huajun Group ROC % Chart

China Huajun Group Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-1.81

-2.56

-1.70

-3.69

-1.31

China Huajun Group Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															-2.16	-0.92	-6.67	-0.57	-2.42

China Huajun Group ROC % Calculation

China Huajun Group'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 )
=	-168.572 * ( 1 - 1.02% )	/	( (15535.983	+	9902.337)	/ 2 )
=	-166.8525656	/	12719.16
=	-1.31 %

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	))
=	12401.183	-	6901.234	-	( 76.367	-	max(0, 16245.636	-	6209.602	+	76.367	))
=	15535.983

	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	))
=	6166.677	-	6604.554	-	( 72.35	-	max(0, 12904.597	-	2564.383	+	72.35	))
=	9902.337

China Huajun Group's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-258.886 * ( 1 - -0.01% )	/	( (11504.094	+	9902.337)	/ 2 )
=	-258.9118886	/	10703.2155
=	-2.42 %

where

	Invested Capital		(Q: Jun. 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	))
=	9319.338	-	6737.187	-	( 82.716	-	max(0, 14414	-	5492.057	+	82.716	))
=	11504.094

	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	))
=	6166.677	-	6604.554	-	( 72.35	-	max(0, 12904.597	-	2564.383	+	72.35	))
=	9902.337

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

China Huajun Group (HKSE:00377) 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, China Huajun Group's WACC % is 13.89%. China Huajun Group's ROC % is -1.35% (calculated using TTM income statement data). China Huajun Group 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.

China Huajun Group ROC % Related Terms

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China Huajun Group (HKSE:00377) Business Description

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GURUFOCUS.COM » STOCK LIST » Basic Materials » Chemicals » China Huajun Group Ltd (HKSE:00377) » Definitions » ROC %

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Address

6-8 Harbour Road, Suites 903-905, 9th Floor, Shui On Centre, Wan Chai, Hong Kong, HKG

Website

https://www.chinahuajungroup.com

China Huajun Group Ltd is an investment holding company. It operates in five segments: Printing, Trading & Logistics, Property Development & Investments, Solar Photovoltaic, and Financial Services. The majority of its revenue comes from the Trading & logistics segment, which is involved in trading, logistics, and supply chain management. Its geographical segments are China, the United States, Hong Kong, European countries, and other countries, of which the United States accounts for the vast majority of its revenue.

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