Shing Chi Holdings (HKSE:01741) ROC % : -25.54% (As of Mar. 2024)

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What is Shing Chi 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 %. Shing Chi Holdings's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was -25.54%.

As of today (2024-12-12), Shing Chi Holdings's WACC % is 5.07%. Shing Chi Holdings's ROC % is -9.88% (calculated using TTM income statement data). Shing Chi Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Shing Chi Holdings ROC % Historical Data

The historical data trend for Shing Chi 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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Shing Chi Holdings ROC % Chart

Shing Chi Holdings Annual Data

Trend

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

ROC %

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-15.92

9.66

-14.60

-98.27

-10.77

Shing Chi Holdings Semi-Annual Data
	Sep15	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23	Mar24
ROC %	Get a 7-Day Free Trial												-40.64	-141.34	-31.57	6.27	-25.54

Shing Chi Holdings ROC % Calculation

Shing Chi Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2023 is calculated as:

	ROC % (A: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2022 )	+	Invested Capital (A: Sep. 2023 ))	/ count )
=	-12.527 * ( 1 - -3% )	/	( (85.343	+	154.346)	/ 2 )
=	-12.90281	/	119.8445
=	-10.77 %

where

	Invested Capital		(A: Sep. 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	))
=	149.131	-	36.626	-	( 53.172	-	max(0, 103.704	-	130.866	+	53.172	))
=	85.343

	Invested Capital		(A: Sep. 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	))
=	201.822	-	20.506	-	( 41.45	-	max(0, 152.208	-	179.178	+	41.45	))
=	154.346

Shing Chi Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-35.874 * ( 1 - -0.22% )	/	( (154.346	+	127.245)	/ 2 )
=	-35.9529228	/	140.7955
=	-25.54 %

where

	Invested Capital		(Q: Sep. 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	))
=	201.822	-	20.506	-	( 41.45	-	max(0, 152.208	-	179.178	+	41.45	))
=	154.346

	Invested Capital		(Q: Mar. 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	))
=	153.397	-	17.508	-	( 29.687	-	max(0, 121.737	-	130.381	+	29.687	))
=	127.245

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

Shing Chi Holdings (HKSE:01741) 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, Shing Chi Holdings's WACC % is 5.07%. Shing Chi Holdings's ROC % is -9.88% (calculated using TTM income statement data). Shing Chi 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.

Shing Chi Holdings ROC % Related Terms

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Shing Chi Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Shing Chi Holdings Ltd (HKSE:01741) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Nos. 317-319 Des Voeux Road Central, 6/F, Kai Tak Commercial Building, Sheung Wan, Hong Kong, HKG

Website

https://www.riyingholding.com

Shing Chi Holdings Ltd formerly Ri Ying Holdings Ltd is an investment holding company. The company's operating segments include foundation and site formation works, general building works and associated services, other construction works, health management and consultancy business, and construction related consultancy services. It generates maximum revenue from Foundation and site formation work segment and geographically from Hong Kong.

Executives

Leaf Cove Limited	2101 Beneficial owner
Sun Wei	2201 Interest of corporation controlled by you
Sun Yaru	2101 Beneficial owner
Elite Bright Developments Limited	2101 Beneficial owner
Kwong Shun Man Jessie	2202 Interest of your spouse
Lau Chi Keung	2201 Interest of corporation controlled by you
Liu Zhiming	2201 Interest of corporation controlled by you
Lau Chi Wang	2201 Interest of corporation controlled by you
Ng Kooi Har	2202 Interest of your spouse
Ng Lai Mui Theresa	2202 Interest of your spouse

Shing Chi Holdings Headlines

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