China Everbright Greentech (HKSE:01257) ROC % : 2.33% (As of Jun. 2024)

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What is China Everbright Greentech 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 Everbright Greentech's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 2.33%.

As of today (2024-12-11), China Everbright Greentech's WACC % is 3.74%. China Everbright Greentech's ROC % is 2.50% (calculated using TTM income statement data). China Everbright Greentech earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China Everbright Greentech ROC % Historical Data

The historical data trend for China Everbright Greentech'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 Everbright Greentech ROC % Chart

China Everbright Greentech Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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10.92

8.53

5.31

2.74

3.07

China Everbright Greentech Semi-Annual Data
	Dec14	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														4.03	-1.80	3.28	1.85	2.33

China Everbright Greentech ROC % Calculation

China Everbright Greentech'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 )
=	1202.945 * ( 1 - 11.04% )	/	( (34096.731	+	35603.03)	/ 2 )
=	1070.139872	/	34849.8805
=	3.07 %

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	))
=	39156.376	-	3131.395	-	( 1928.25	-	max(0, 9061.772	-	12443.062	+	1928.25	))
=	34096.731

	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	))
=	39757.424	-	2614.686	-	( 2331.422	-	max(0, 12943.689	-	14483.397	+	2331.422	))
=	35603.03

China Everbright Greentech'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 )
=	1239.938 * ( 1 - 33.98% )	/	( (35603.03	+	34578.812)	/ 2 )
=	818.6070676	/	35090.921
=	2.33 %

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	))
=	39757.424	-	2614.686	-	( 2331.422	-	max(0, 12943.689	-	14483.397	+	2331.422	))
=	35603.03

	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	))
=	38891.411	-	2303.686	-	( 2008.913	-	max(0, 10225.627	-	14014.362	+	2008.913	))
=	34578.812

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

China Everbright Greentech (HKSE:01257) 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 Everbright Greentech's WACC % is 3.74%. China Everbright Greentech's ROC % is 2.50% (calculated using TTM income statement data). China Everbright Greentech 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 Everbright Greentech ROC % Related Terms

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China Everbright Greentech Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Independent Power Producers » China Everbright Greentech Ltd (HKSE:01257) » Definitions » ROC %

Traded in Other Exchanges

CK7:Germany

Address

16 Harcourt Road, Room 3602, 36th Floor, Far East Finance Centre, Hong Kong, HKG

Website

https://www.ebgreentech.com

China Everbright Greentech Ltd is an investment holding company. It operates in the following segments: Integrated biomass utilization project construction and operation; Hazardous and solid waste treatment project construction and operation; Environmental remediation project operation; Solar energy, and wind power project operation. The company derives the majority of its revenue from the integrated biomass utilization segment, which engages in the construction and operation of biomass direct combustion power generation projects, biomass heat supply projects, biomass electricity, and heat cogeneration projects, waste-to-energy projects, and integrated biomass and waste-to-energy project. Its geographical segments are China which generates key revenue, Hong Kong, and Germany.

Executives

Ning Bo Kai Fa Tou Zi Ji Tuan You Xian Gong Si	2101 Beneficial owner
Ning Bo Neng Yuan Ji Tuan Gu Fen You Xian Gong Si	2101 Beneficial owner
China Everbright Holdings Company Limited	2201 Interest of corporation controlled by you
Ning Bo Ning Dian Tou Zi Fa Zhan You Xian Gong Si	2101 Beneficial owner

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