Guan Chao Holdings (HKSE:01872) ROC % : 1.06% (As of Jun. 2024)

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What is Guan Chao 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 %. Guan Chao Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 1.06%.

As of today (2025-03-28), Guan Chao Holdings's WACC % is 7.15%. Guan Chao Holdings's ROC % is 1.88% (calculated using TTM income statement data). Guan Chao Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Guan Chao Holdings ROC % Historical Data

The historical data trend for Guan Chao 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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Guan Chao Holdings ROC % Chart

Guan Chao Holdings Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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4.96

4.67

10.96

5.01

5.45

Guan Chao Holdings Semi-Annual Data
	Dec16	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial										5.41	4.82	8.08	2.76	1.06

Guan Chao Holdings ROC % Calculation

Guan Chao 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 )
=	54.031 * ( 1 - 17.12% )	/	( (840.204	+	802.496)	/ 2 )
=	44.7808928	/	821.35
=	5.45 %

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	))
=	903.977	-	31.953	-	( 31.82	-	max(0, 346.127	-	490.858	+	31.82	))
=	840.204

	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	))
=	902.509	-	23.944	-	( 76.069	-	max(0, 178.686	-	461.383	+	76.069	))
=	802.496

Guan Chao 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 )
=	15.334 * ( 1 - 44.21% )	/	( (802.496	+	810.803)	/ 2 )
=	8.5548386	/	806.6495
=	1.06 %

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	))
=	902.509	-	23.944	-	( 76.069	-	max(0, 178.686	-	461.383	+	76.069	))
=	802.496

	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	))
=	884.523	-	23.903	-	( 49.817	-	max(0, 192.56	-	486.015	+	49.817	))
=	810.803

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

Guan Chao Holdings (HKSE:01872) 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, Guan Chao Holdings's WACC % is 7.15%. Guan Chao Holdings's ROC % is 1.88% (calculated using TTM income statement data). Guan Chao 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.

Guan Chao Holdings ROC % Related Terms

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Guan Chao Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Guan Chao Holdings Ltd (HKSE:01872) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

24 Leng Kee Road, No. 01-02, Leng Kee Autopoint, Singapore, SGP, 159096

Website

https://www.guanchaoholdingsltd.com

Guan Chao Holdings Ltd is a multi-brand car dealership and importer of new and pre-owned cars in Singapore. The company is engaged in the sale of new parallel-import motor vehicles and pre-owned motor vehicles, the provision of motor vehicle financing services and motor vehicle insurance agency services, the sale of motor vehicle spare parts and accessories, and the provision of motor vehicle leasing services. Its segment comprises Sales of motor vehicles and provision of related services; Rental income from operating lease of motor vehicles; and Sales of spare parts and accessories.

Executives

Liu Zhiwei	2201 Interest of corporation controlled by you
Trenda Group Holdings Limited	2101 Beneficial owner
Chunda International Capital Management Co., Limited	2201 Interest of corporation controlled by you
Beng Lee Ser Marisa
Tan Shuay Tarng Vincent	2101 Beneficial owner
Gatehouse Ventures Limited	2101 Beneficial owner
Tan Jun Wei Ethan	2101 Beneficial owner
Show Achieve Limited	2101 Beneficial owner
Wu Bin	2201 Interest of corporation controlled by you
Ang De Yu	2101 Beneficial owner

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