Hingtex Holdings (HKSE:01968) ROC % : -13.60% (As of Jun. 2024)

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What is Hingtex 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 %. Hingtex Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -13.60%.

As of today (2025-03-28), Hingtex Holdings's WACC % is 5.92%. Hingtex Holdings's ROC % is -14.83% (calculated using TTM income statement data). Hingtex Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Hingtex Holdings ROC % Historical Data

The historical data trend for Hingtex 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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Hingtex Holdings ROC % Chart

Hingtex Holdings Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-0.22

-15.33

-6.68

-16.62

-14.70

Hingtex Holdings Semi-Annual Data
	Dec15	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial												-14.12	-19.14	-14.47	-15.76	-13.60

Hingtex Holdings ROC % Calculation

Hingtex 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 )
=	-45.258 * ( 1 - 12.64% )	/	( (280.697	+	257.182)	/ 2 )
=	-39.5373888	/	268.9395
=	-14.70 %

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	))
=	394.417	-	29.027	-	( 84.693	-	max(0, 68.417	-	230.869	+	84.693	))
=	280.697

	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	))
=	343.183	-	25.261	-	( 60.74	-	max(0, 58.583	-	190.611	+	60.74	))
=	257.182

Hingtex 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 )
=	-33.766 * ( 1 - -0.27% )	/	( (257.182	+	240.747)	/ 2 )
=	-33.8571682	/	248.9645
=	-13.60 %

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	))
=	343.183	-	25.261	-	( 60.74	-	max(0, 58.583	-	190.611	+	60.74	))
=	257.182

	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	))
=	341.21	-	42.563	-	( 57.9	-	max(0, 74.127	-	196.973	+	57.9	))
=	240.747

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

Hingtex Holdings (HKSE:01968) 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, Hingtex Holdings's WACC % is 5.92%. Hingtex Holdings's ROC % is -14.83% (calculated using TTM income statement data). Hingtex 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.

Hingtex Holdings ROC % Related Terms

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Hingtex Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » Hingtex Holdings Ltd (HKSE:01968) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

Gaoping Industrial Area, Guangdong Province, Zhongshan, CHN

Website

https://www.hwtextiles.com.hk

Hingtex Holdings Ltd manufactures and sells denim fabric. It sells denim fabrics and yarns directly to customers, which mainly include garment manufacturers. The company's denim fabrics are categorized into three types, namely non-stretchable denim fabrics, stretchable cotton denim fabrics, and stretchable blended denim fabrics. Geographically, it has a world-wide business presence and derives key revenue from the PRC and Hong Kong.

Executives

Manford Investment Holdings Limited	2101 Beneficial owner
Fung Cheong Chi	2202 Interest of your spouse
Lau Chung Chau	2201 Interest of corporation controlled by you
Li Chi Hiu Lawrence	2202 Interest of your spouse
Li Ka Mei	2202 Interest of your spouse
Tung Cheuk Ming Stanley	2201 Interest of corporation controlled by you
Tung Tsun Hong	2201 Interest of corporation controlled by you
Tung Wai Lai Mabel	2201 Interest of corporation controlled by you
Tung Wai Ting Stephen	2201 Interest of corporation controlled by you
Tung Wei Ling Barbara	2201 Interest of corporation controlled by you

Hingtex Holdings Headlines

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