China Oriental Group Co (HKSE:00581) ROC % : 1.40% (As of Jun. 2024)

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What is China Oriental Group Co 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 Oriental Group Co's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 1.40%.

As of today (2024-12-14), China Oriental Group Co's WACC % is 3.75%. China Oriental Group Co's ROC % is -0.63% (calculated using TTM income statement data). China Oriental Group Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China Oriental Group Co ROC % Historical Data

The historical data trend for China Oriental Group Co'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 Oriental Group Co ROC % Chart

China Oriental Group Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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15.03

5.26

7.57

1.27

-0.74

China Oriental Group Co 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															4.64	-1.90	0.82	-2.59	1.40

China Oriental Group Co ROC % Calculation

China Oriental Group Co'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 )
=	-491.892 * ( 1 - 37.63% )	/	( (41882.144	+	41389.186)	/ 2 )
=	-306.7930404	/	41635.665
=	-0.74 %

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	))
=	53628.65	-	7102.799	-	( 7491.649	-	max(0, 23622.975	-	28266.682	+	7491.649	))
=	41882.144

	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	))
=	54721.946	-	7424.223	-	( 8618.574	-	max(0, 24661.18	-	30569.717	+	8618.574	))
=	41389.186

China Oriental Group Co'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 )
=	665.446 * ( 1 - 14.03% )	/	( (41389.186	+	40238.658)	/ 2 )
=	572.0839262	/	40813.922
=	1.40 %

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	))
=	54721.946	-	7424.223	-	( 8618.574	-	max(0, 24661.18	-	30569.717	+	8618.574	))
=	41389.186

	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	))
=	56211.588	-	7060.426	-	( 11406.369	-	max(0, 25009.699	-	33922.203	+	11406.369	))
=	40238.658

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

China Oriental Group Co (HKSE:00581) 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 Oriental Group Co's WACC % is 3.75%. China Oriental Group Co's ROC % is -0.63% (calculated using TTM income statement data). China Oriental Group Co 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 Oriental Group Co ROC % Related Terms

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China Oriental Group Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » China Oriental Group Co Ltd (HKSE:00581) » Definitions » ROC %

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CUGCY:USA ORG:Germany

Address

23 Harbour Road, Suites 901-2 and 10, 9th Floor, Great Eagle Centre, Wanchai, Hong Kong, HKG

Website

http://www.chinaorientalgroup.com

China Oriental Group Co Ltd is an iron and steel producer. The company is organized into two main operating segments: Iron and Steel and Real Estate. The Iron and Steel segment is comprised of the manufacturing and sale of iron and steel products and trading of steel products and iron ore and under its Real Estate segment it develops and sells properties. China Oriental produces downstream products including H-section steel, Cold rolled sheets, Galvanized sheets, Strips and strip products, Billets, Rebar, and Steel pile sheets. The company generates the majority of its revenue from the Iron and Steel segment. The firm's major customers are based in Northern China.

Executives

Han Jingyuan	2101 Beneficial owner
Wellbeing Holdings Limited	2101 Beneficial owner

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