Fufeng Group (HKSE:00546) ROC % : 6.85% (As of Jun. 2024)

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What is Fufeng 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 %. Fufeng Group's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 6.85%.

As of today (2025-03-02), Fufeng Group's WACC % is 5.26%. Fufeng Group's ROC % is 10.41% (calculated using TTM income statement data). Fufeng Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Fufeng Group ROC % Historical Data

The historical data trend for Fufeng 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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Fufeng Group ROC % Chart

Fufeng Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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8.22

5.38

9.68

21.66

13.94

Fufeng Group 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															23.57	20.75	16.06	14.21	6.85

Fufeng Group ROC % Calculation

Fufeng 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 )
=	3818.866 * ( 1 - 18.34% )	/	( (19116.459	+	25629.425)	/ 2 )
=	3118.4859756	/	22372.942
=	13.94 %

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	))
=	29468.565	-	3133.155	-	( 7826.066	-	max(0, 10483.712	-	17702.663	+	7826.066	))
=	19116.459

	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	))
=	35614.411	-	3782.491	-	( 7499.142	-	max(0, 15361.643	-	21564.138	+	7499.142	))
=	25629.425

Fufeng Group'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 )
=	2143.166 * ( 1 - 15.2% )	/	( (25629.425	+	27419.824)	/ 2 )
=	1817.404768	/	26524.6245
=	6.85 %

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	))
=	35614.411	-	3782.491	-	( 7499.142	-	max(0, 15361.643	-	21564.138	+	7499.142	))
=	25629.425

	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	))
=	37572.594	-	3864.128	-	( 10591.034	-	max(0, 16992.937	-	23281.579	+	10591.034	))
=	27419.824

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

Fufeng Group (HKSE:00546) 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, Fufeng Group's WACC % is 5.26%. Fufeng Group's ROC % is 10.41% (calculated using TTM income statement data). Fufeng Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Fufeng Group ROC % Related Terms

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Fufeng Group Business Description

Industry

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Address

12/F, Tower 3,33 Canton Road, Suite 1204B–7A China, Tsim Sha Tsui, Kowloon, Hong Kong City, HKG

Website

http://www.fufeng-group.com

Fufeng Group Ltd manufactures and sells a variety of chemicals primarily used by the food and agricultural industries. The company's operating segments include Food additives; Animal nutrition; High-end amino acid; Colloid and others. It generates maximum revenue from the Food additives segment. The Food additives segment is engaged in the manufacturing and sale of food additives products, including monosodium glutamate (MSG), starch sweeteners, glutamic acid, compound seasoning, and corn oil. The majority of revenue comes from China.

Executives

Stichting Administratiekantoor Hermes Hercule	2303 Depositary
Motivator Enterprises Limited	2101 Beneficial owner
Li Xuechun	2201 Interest of corporation controlled by you
Shi Guiling	2202 Interest of your spouse
Berghmans Jacques Marie J.	2101 Beneficial owner
Waucquez Christiane Louise M.	2202 Interest of your spouse
Treetop Asset Management Sa	2102 Investment manager

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