Risecomm Group Holdings (HKSE:01679) ROC % : -15.99% (As of Jun. 2024)

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What is Risecomm Group 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 %. Risecomm Group Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -15.99%.

As of today (2024-12-14), Risecomm Group Holdings's WACC % is 3.48%. Risecomm Group Holdings's ROC % is -26.48% (calculated using TTM income statement data). Risecomm Group Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Risecomm Group Holdings ROC % Historical Data

The historical data trend for Risecomm Group 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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Risecomm Group Holdings ROC % Chart

Risecomm Group Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-12.80

-17.30

-14.19

-14.45

-30.64

Risecomm Group Holdings 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														-13.51	-16.07	-21.10	-37.26	-15.99

Risecomm Group Holdings ROC % Calculation

Risecomm Group 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 )
=	-66.794 * ( 1 - -19.27% )	/	( (291.479	+	228.563)	/ 2 )
=	-79.6652038	/	260.021
=	-30.64 %

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	))
=	381.179	-	107.539	-	( 96.766	-	max(0, 278.331	-	260.492	+	96.766	))
=	291.479

	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	))
=	273.978	-	64.979	-	( 39.287	-	max(0, 186.379	-	166.815	+	39.287	))
=	228.563

Risecomm Group 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 )
=	-40.194 * ( 1 - -2.09% )	/	( (228.563	+	284.628)	/ 2 )
=	-41.0340546	/	256.5955
=	-15.99 %

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	))
=	273.978	-	64.979	-	( 39.287	-	max(0, 186.379	-	166.815	+	39.287	))
=	228.563

	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	))
=	317.146	-	65.142	-	( 34.997	-	max(0, 198.546	-	165.922	+	34.997	))
=	284.628

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

Risecomm Group Holdings (HKSE:01679) 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, Risecomm Group Holdings's WACC % is 3.48%. Risecomm Group Holdings's ROC % is -26.48% (calculated using TTM income statement data). Risecomm Group 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.

Risecomm Group Holdings ROC % Related Terms

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Risecomm Group Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Risecomm Group Holdings Ltd (HKSE:01679) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

Xili Street, 41st Floor, Block A, Building 8, Shenzhen International Innovation Valley, Nanshan Distric, Shenzhen, CHN, 518055

Website

https://www.risecomm.com.cn

Risecomm Group Holdings Ltd is an investment holding company. It operates in two business segments namely, Automated Meter Reading (AMR) and other includes design, development, and sale of power line communication products and energy-saving and environmental protection products and solutions used in streetlight control, building energy management, photovoltaic power management, and providing maintenance services in connections with the deployment and upgrading of AMR systems in PRC; and Smart manufacturing & industrial automation (SMIA) business segment includes the sales of the software license, safety products as well as the provision of software post-contract customers support services. It generates revenue from SMIA business. Geographically, it derives revenue from the PRC.

Executives

Fu Xiaoqin	2101 Beneficial owner
Xindaxin Group Company Limited	2101 Beneficial owner
Silver Castle International Limited	2201 Interest of corporation controlled by you
Yan Andrew Y	2201 Interest of corporation controlled by you
Wu Yueshi	2201 Interest of corporation controlled by you
Sb Asia Investment Fund Ii L.p.	2101 Beneficial owner
Saif Partners Ii Lp	2201 Interest of corporation controlled by you
Saif Ii Gp Lp	2201 Interest of corporation controlled by you
Saif Ii Gp Capital Ltd.	2201 Interest of corporation controlled by you
Cisco Systems, Inc.	2201 Interest of corporation controlled by you
Liu Bei Bei	2101 Beneficial owner
Yu Lu	2101 Beneficial owner
Ding Zhigang	2101 Beneficial owner
Ning Jun	2101 Beneficial owner
Spitzer Fund Vi L.p.

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