Chinese People Holdings Co (HKSE:00681) ROC % : 1.51% (As of Dec. 2023)

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What is Chinese People Holdings 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 %. Chinese People Holdings Co's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 1.51%.

As of today (2024-06-01), Chinese People Holdings Co's WACC % is 6.41%. Chinese People Holdings Co's ROC % is 2.10% (calculated using TTM income statement data). Chinese People Holdings Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Chinese People Holdings Co ROC % Historical Data

The historical data trend for Chinese People Holdings 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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Chinese People Holdings Co ROC % Chart

Chinese People Holdings Co Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Dec21

Dec22

Dec23

ROC %

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3.18

3.59

3.69

0.93

2.15

Chinese People Holdings Co Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															4.68	1.05	0.44	1.98	1.51

Chinese People Holdings Co ROC % Calculation

Chinese People Holdings 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 )
=	63.297 * ( 1 - -12.33% )	/	( (3479.344	+	3125.616)	/ 2 )
=	71.1015201	/	3302.48
=	2.15 %

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	))
=	4023.338	-	212.195	-	( 619.905	-	max(0, 655.937	-	987.736	+	619.905	))
=	3479.344

	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	))
=	3667.665	-	216.847	-	( 679.342	-	max(0, 656.789	-	981.991	+	679.342	))
=	3125.616

Chinese People Holdings Co'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 )
=	48.084 * ( 1 - -5.04% )	/	( (3547.643	+	3125.616)	/ 2 )
=	50.5074336	/	3336.6295
=	1.51 %

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	))
=	4019.3	-	118.6	-	( 597.664	-	max(0, 635.904	-	988.961	+	597.664	))
=	3547.643

	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	))
=	3667.665	-	216.847	-	( 679.342	-	max(0, 656.789	-	981.991	+	679.342	))
=	3125.616

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

Chinese People Holdings Co (HKSE:00681) 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, Chinese People Holdings Co's WACC % is 6.41%. Chinese People Holdings Co's ROC % is 2.10% (calculated using TTM income statement data). Chinese People Holdings 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.

Chinese People Holdings Co ROC % Related Terms

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Chinese People Holdings Co (HKSE:00681) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » Chinese People Holdings Co Ltd (HKSE:00681) » Definitions » ROC %

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Traded in Other Exchanges

KEH:Germany

Address

No. 2 Jingyuan North Street, No. 36 BDA International Business Park, Economic Technological Development Area, Beijing, CHN

Website

http://www.681hk.com

Chinese People Holdings Co Ltd is an investment holding company. Its segments are Piped gas transmission & distribution, which is into sales of piped gas and construction of gas pipeline networks under gas connection contracts; Cylinder gas supply segment includes sales and distribution of gas using tank containers to end-user households, industrial and commercial customers; Gas distribution segment is into sales of natural gas to industrial and commercial customers; and FMCG & food ingredients supply which is into wholesales and retail of merchandise through supermarkets and convenience stores. Geographically, it derives revenue from China.

Executives

Renown City Holdings Limited	2201 Interest of corporation controlled by you
Civios Group Limited	2201 Interest of corporation controlled by you
Mo Shikang	2201 Interest of corporation controlled by you
Mo Yunbi	2201 Interest of corporation controlled by you
Lofty Key Limited	2101 Beneficial owner
Ping Da Fa Zhan You Xian Gong Si	2201 Interest of corporation controlled by you

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