South China Financial Holdings (HKSE:00619) ROC % : -5.31% (As of Jun. 2024)

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What is South China Financial 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 %. South China Financial Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -5.31%.

As of today (2025-04-04), South China Financial Holdings's WACC % is 4.20%. South China Financial Holdings's ROC % is -6.61% (calculated using TTM income statement data). South China Financial Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

South China Financial Holdings ROC % Historical Data

The historical data trend for South China Financial 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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South China Financial Holdings ROC % Chart

South China Financial Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-3.29

-7.08

-2.72

-7.90

-6.62

South China Financial Holdings 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															-9.74	-6.16	-5.32	-7.98	-5.31

South China Financial Holdings ROC % Calculation

South China Financial 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 )
=	-81.145 * ( 1 - 2.58% )	/	( (1274.443	+	1115.346)	/ 2 )
=	-79.051459	/	1194.8945
=	-6.62 %

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	))
=	1267.532	-	68.124	-	( 175.218	-	max(0, 777.286	-	702.251	+	175.218	))
=	1274.443

	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	))
=	1109.314	-	102.295	-	( 99.027	-	max(0, 607.511	-	499.184	+	99.027	))
=	1115.346

South China Financial Holdings'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 )
=	-59.886 * ( 1 - 0.89% )	/	( (1115.346	+	1119.839)	/ 2 )
=	-59.3530146	/	1117.5925
=	-5.31 %

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	))
=	1109.314	-	102.295	-	( 99.027	-	max(0, 607.511	-	499.184	+	99.027	))
=	1115.346

	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	))
=	1083.221	-	87.511	-	( 89.939	-	max(0, 609.149	-	485.02	+	89.939	))
=	1119.839

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

South China Financial Holdings (HKSE:00619) 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, South China Financial Holdings's WACC % is 4.20%. South China Financial Holdings's ROC % is -6.61% (calculated using TTM income statement data). South China Financial 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.

South China Financial Holdings ROC % Related Terms

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South China Financial Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Capital Markets » South China Financial Holdings Ltd (HKSE:00619) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1 Garden Road, 28th Floor, Bank of China Tower, Central, Hong Kong, HKG

Website

https://www.sctrade.com

South China Financial Holdings Ltd is an investment holding company. Its business activities are segmented as Broking segment; Trading and investment segment; Margin financing and money lending segment; Corporate advisory and underwriting segment; Asset and wealth management segment; Property investment segment; Media publications and financial public relation services segment; Jewellery business segment; and other business segments that engage in the provision of clearing and custodian services. It generates key revenue from the Media publications and financial public relations services segment. The group generates prime revenue from Hong Kong.

Executives

Ng Yuk Yeung Paul	2101 Beneficial owner
Thousand China Investments Limited	2101 Beneficial owner
Ng Hung Sang	2201 Interest of corporation controlled by you
Ng Lai King Pamela	2202 Interest of your spouse
Total Grace Investments Limited	2101 Beneficial owner
Parkfield Holdings Limited	2101 Beneficial owner
Fung Shing Group Limited	2101 Beneficial owner

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