Chu Kong Petroleum and Natural Gas Steel Pipe Holdings (HKSE:01938) ROC % : 10.46% (As of Jun. 2024)

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What is Chu Kong Petroleum and Natural Gas Steel Pipe 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 %. Chu Kong Petroleum and Natural Gas Steel Pipe Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 10.46%.

As of today (2024-12-11), Chu Kong Petroleum and Natural Gas Steel Pipe Holdings's WACC % is 0.80%. Chu Kong Petroleum and Natural Gas Steel Pipe Holdings's ROC % is -25.71% (calculated using TTM income statement data). Chu Kong Petroleum and Natural Gas Steel Pipe Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings ROC % Historical Data

The historical data trend for Chu Kong Petroleum and Natural Gas Steel Pipe 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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Chu Kong Petroleum and Natural Gas Steel Pipe Holdings ROC % Chart

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-1.66

-0.99

0.55

7.30

20.21

Chu Kong Petroleum and Natural Gas Steel Pipe 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															5.97	-3.33	6.14	-0.64	10.46

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings ROC % Calculation

Chu Kong Petroleum and Natural Gas Steel Pipe 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 )
=	246.444 * ( 1 - -370.27% )	/	( (5412.111	+	6055.089)	/ 2 )
=	1158.9521988	/	5733.6
=	20.21 %

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	))
=	7319.995	-	1889.874	-	( 18.01	-	max(0, 4051.095	-	4136.896	+	18.01	))
=	5412.111

	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	))
=	7023.615	-	1893.583	-	( 35.21	-	max(0, 4784.58	-	3859.523	+	35.21	))
=	6055.089

Chu Kong Petroleum and Natural Gas Steel Pipe 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 )
=	416.164 * ( 1 - -49.44% )	/	( (6055.089	+	5835.241)	/ 2 )
=	621.9154816	/	5945.165
=	10.46 %

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	))
=	7023.615	-	1893.583	-	( 35.21	-	max(0, 4784.58	-	3859.523	+	35.21	))
=	6055.089

	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	))
=	6964.931	-	1935.631	-	( 80.887	-	max(0, 4682.991	-	3877.05	+	80.887	))
=	5835.241

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

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings (HKSE:01938) 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, Chu Kong Petroleum and Natural Gas Steel Pipe Holdings's WACC % is 0.80%. Chu Kong Petroleum and Natural Gas Steel Pipe Holdings's ROC % is -25.71% (calculated using TTM income statement data). Chu Kong Petroleum and Natural Gas Steel Pipe 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.

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings ROC % Related Terms

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Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Ltd (HKSE:01938) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

2nd Floor, 3-5 Golden Dragon City, Yayun Avenue, Panyu District, Guangdong Province, Guangzhou, CHN, 511450

Website

http://www.pck.com.cn

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Ltd operates in the steel pipe business. The group is involved in its key revenue-generating business which is to manufacture and sell welded steel pipes and the provision of related manufacturing services. The group's steel pipes are mainly used for energy transmission including oil and gas transmission pipelines, deep-sea pipelines, city gas networks, petrochemicals, mining, infrastructure construction, offshore engineering, steel structures, and water utilities industries. Further, it is also involved in the development of properties for sale; and property investment activities. The group has a business presence in Mainland China and other countries, of which maximum revenue is derived from Mainland China.

Executives

Bournam Profits Limited
Chen Chang

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