Jia Yao Holdings (HKSE:01626) ROC % : 12.77% (As of Jun. 2024)

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What is Jia Yao 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 %. Jia Yao Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 12.77%.

As of today (2024-12-15), Jia Yao Holdings's WACC % is 4.74%. Jia Yao Holdings's ROC % is 35.46% (calculated using TTM income statement data). Jia Yao Holdings generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Jia Yao Holdings ROC % Historical Data

The historical data trend for Jia Yao 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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Jia Yao Holdings ROC % Chart

Jia Yao Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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4.48

-9.10

-8.41

3.80

44.46

Jia Yao 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															1.76	7.38	20.50	64.62	12.77

Jia Yao Holdings ROC % Calculation

Jia Yao 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 )
=	191.637 * ( 1 - 18.76% )	/	( (321.923	+	378.452)	/ 2 )
=	155.6858988	/	350.1875
=	44.46 %

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	))
=	1197.999	-	645.408	-	( 297.688	-	max(0, 740.772	-	971.44	+	297.688	))
=	321.923

	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	))
=	1602.649	-	883.861	-	( 340.336	-	max(0, 988.071	-	1331.924	+	340.336	))
=	378.452

Jia Yao 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 )
=	77.434 * ( 1 - 26.58% )	/	( (378.452	+	512.09)	/ 2 )
=	56.8520428	/	445.271
=	12.77 %

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	))
=	1602.649	-	883.861	-	( 340.336	-	max(0, 988.071	-	1331.924	+	340.336	))
=	378.452

	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	))
=	1538.148	-	750.629	-	( 467.42	-	max(0, 919.222	-	1194.651	+	467.42	))
=	512.09

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

Jia Yao Holdings (HKSE:01626) 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, Jia Yao Holdings's WACC % is 4.74%. Jia Yao Holdings's ROC % is 35.46% (calculated using TTM income statement data). Jia Yao Holdings generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Jia Yao Holdings ROC % Related Terms

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Jia Yao Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Packaging & Containers » Jia Yao Holdings Ltd (HKSE:01626) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

Number 6 Qingdao Road, Dongshan Economic Developing District, Hubei Province, Yichang, CHN

Website

http://www.jiayaoholdings.com/en

Jia Yao Holdings Ltd is involved in the business of design, printing and sales of paper cigarette packages and social product paper packages. The segments of the group are Paper cigarette packages; Electronic cigarettes and Trading goods. It derives key revenue from the Paper cigarette packages segment which involves the design, printing and sale of paper cigarette packages. The company manufactures various types of paper cigarette packages for customers, which can be broadly divided into Hard and soft cigarette packets; Cigarette cartons; and Gift sets designed to pack and carry various sets of cigarette packets. Social product paper packages segment involves the design, printing and sale of packages for alcohol, medicines and food, among others.

Executives

Cai Yaohui	2202 Interest of your spouse
Spearhead Leader Limited	2101 Beneficial owner
Yang Yoong An	2201 Interest of corporation controlled by you
Feng Bin	2201 Interest of corporation controlled by you
Star Glide Limited	2101 Beneficial owner
Zhao Yi	2202 Interest of your spouse
First Shanghai Securities Limited	2105 Underwriter

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