Wai Kee Holdings (HKSE:00610) ROC % : 6.12% (As of Dec. 2023)

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What is Wai Kee 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 %. Wai Kee Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 6.12%.

As of today (2024-06-23), Wai Kee Holdings's WACC % is 6.89%. Wai Kee Holdings's ROC % is 6.65% (calculated using TTM income statement data). Wai Kee Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Wai Kee Holdings ROC % Historical Data

The historical data trend for Wai Kee 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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Wai Kee Holdings ROC % Chart

Wai Kee Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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2.18

2.31

2.43

2.12

6.71

Wai Kee Holdings Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															2.58	2.37	1.68	7.98	6.12

Wai Kee Holdings ROC % Calculation

Wai Kee 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 )
=	771.117 * ( 1 - -14.16% )	/	( (13607.277	+	12647.281)	/ 2 )
=	880.3071672	/	13127.279
=	6.71 %

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	))
=	17592.094	-	2051.532	-	( 3080.267	-	max(0, 5288.446	-	7221.731	+	3080.267	))
=	13607.277

	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	))
=	16355.574	-	1968.842	-	( 2088.383	-	max(0, 5701.937	-	7441.388	+	2088.383	))
=	12647.281

Wai Kee Holdings'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 )
=	730.622 * ( 1 - -9.33% )	/	( (13448.964	+	12647.281)	/ 2 )
=	798.7890326	/	13048.1225
=	6.12 %

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	))
=	17170.929	-	1680.699	-	( 2535.172	-	max(0, 5135.187	-	7176.453	+	2535.172	))
=	13448.964

	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	))
=	16355.574	-	1968.842	-	( 2088.383	-	max(0, 5701.937	-	7441.388	+	2088.383	))
=	12647.281

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

Wai Kee Holdings (HKSE:00610) 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, Wai Kee Holdings's WACC % is 6.89%. Wai Kee Holdings's ROC % is 6.65% (calculated using TTM income statement data). Wai Kee 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.

Wai Kee Holdings ROC % Related Terms

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Wai Kee Holdings (HKSE:00610) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Wai Kee Holdings Ltd (HKSE:00610) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

98 Granville Road, Unit 1103, 11th Floor, East Ocean Centre, Tsimshatsui, Kowloon, HKG

Website

http://www.waikee.com

Wai Kee Holdings Ltd is engaged in construction and material businesses. It operates through four business segments. The Construction, sewage treatment and steam fuel segment, which is the key revenue generating segment, is engaged in the construction of civil engineering and building projects and operation of sewage treatment plant and steam fuel plant. Construction Materials segment is engaged in the production and sales of concrete and asphalt. Quarrying segment is engaged in the production and sales of quarry products. Property development and investment, toll road, investment and asset management segment is engaged in the strategic investment in Road King, an associate of the Group. Its prime geographical areas of operation includes Hong Kong and China.

Executives

Zen Wei Pao, William	2101 Beneficial owner
Zen Wei Peu	2402 A person making a loan or providing security
Cheng Yu Tung Family (holdings Ii) Limited	2201 Interest of corporation controlled by you
Cheng Yu Tung Family (holdings) Limited	2201 Interest of corporation controlled by you
Chow Tai Fook (holding) Limited	2201 Interest of corporation controlled by you
Chow Tai Fook Capital Limited	2201 Interest of corporation controlled by you
Chow Tai Fook Enterprises Limited	2201 Interest of corporation controlled by you
Century Acquisition Limited	2201 Interest of corporation controlled by you
Nws Holdings Limited	2201 Interest of corporation controlled by you
New World Development Company Limited	2201 Interest of corporation controlled by you

Wai Kee Holdings (HKSE:00610) Headlines

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