L K Technology Holdings (HKSE:00558) ROC % : 4.09% (As of Sep. 2024)

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What is L K Technology 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 %. L K Technology Holdings's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 4.09%.

As of today (2024-12-14), L K Technology Holdings's WACC % is 9.22%. L K Technology Holdings's ROC % is 6.79% (calculated using TTM income statement data). L K Technology Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

L K Technology Holdings ROC % Historical Data

The historical data trend for L K Technology 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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L K Technology Holdings ROC % Chart

L K Technology Holdings Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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0.18

9.26

13.21

9.62

7.93

L K Technology Holdings Semi-Annual Data
	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23	Mar24	Sep24
ROC %	Get a 7-Day Free Trial															10.49	9.14	6.49	9.80	4.09

L K Technology Holdings ROC % Calculation

L K Technology Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	574.574 * ( 1 - 13.57% )	/	( (5835.607	+	6685.249)	/ 2 )
=	496.6043082	/	6260.428
=	7.93 %

where

	Invested Capital		(A: Mar. 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	))
=	8539.878	-	2098.906	-	( 605.365	-	max(0, 4269.428	-	5545.21	+	605.365	))
=	5835.607

	Invested Capital		(A: Mar. 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	))
=	10905.823	-	1845.398	-	( 2375.176	-	max(0, 4155.585	-	7630.923	+	2375.176	))
=	6685.249

L K Technology Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	336.864 * ( 1 - 14.79% )	/	( (6685.249	+	7362.095)	/ 2 )
=	287.0418144	/	7023.672
=	4.09 %

where

	Invested Capital		(Q: Mar. 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	))
=	10905.823	-	1845.398	-	( 2375.176	-	max(0, 4155.585	-	7630.923	+	2375.176	))
=	6685.249

	Invested Capital		(Q: Sep. 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	))
=	11145.412	-	1981.65	-	( 1801.667	-	max(0, 4293.185	-	7622.804	+	1801.667	))
=	7362.095

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

L K Technology Holdings (HKSE:00558) 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, L K Technology Holdings's WACC % is 9.22%. L K Technology Holdings's ROC % is 6.79% (calculated using TTM income statement data). L K Technology 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.

L K Technology Holdings ROC % Related Terms

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L K Technology Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » L K Technology Holdings Ltd (HKSE:00558) » Definitions » ROC %

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L5D:Germany

Address

1-7 Wah Sing Street, Unit A, 8th Floor, Mai Wah Industrial Building, Kwai Chung, New Territories, Hong Kong, HKG

Website

https://www.lk.world

L K Technology Holdings Ltd is an investment holding company. It is principally engaged in the design, manufacture, and sales of the hot chamber and cold chamber die-casting machines, plastic injection moulding machines, computerized numerical controlled (CNC) machining centers and related accessories. The company's operating segment includes Die-casting machine; Plastic injection moulding machine and CNC machining centre. It generates maximum revenue from the Die-casting machine segment. Geographically, it derives a majority of revenue from Mainland China and also has a presence in Europe, North America, Central America and South America and Other countries.

Executives

Girgio Industries Limited	2101 Beneficial owner
Hsbc International Trustee Limited	2301 Trustee
Chong Siw Yin	2305 Beneficiary of a trust
Liu Siong Song	2202 Interest of your spouse
Liu Zhuo Ming	2305 Beneficiary of a trust
Citigroup Inc.	2201 Interest of corporation controlled by you
Arya Yang Family Limited	2101 Beneficial owner
Cantrust (far East) Limited	2301 Trustee
Cloudalpha Capital Management Limited	2101 Beneficial owner
Singularity Co. Ltd	2101 Beneficial owner
Yang Jin	2201 Interest of corporation controlled by you
Cloudalpha Master Fund	2101 Beneficial owner

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