Zhixin Group Holding (HKSE:02187) ROC % : -10.52% (As of Jun. 2024)

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What is Zhixin Group Holding 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 %. Zhixin Group Holding's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -10.52%.

As of today (2025-03-02), Zhixin Group Holding's WACC % is 3.36%. Zhixin Group Holding's ROC % is -1.19% (calculated using TTM income statement data). Zhixin Group Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Zhixin Group Holding ROC % Historical Data

The historical data trend for Zhixin Group Holding'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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Zhixin Group Holding ROC % Chart

Zhixin Group Holding Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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14.08

18.36

4.26

-0.34

2.22

Zhixin Group Holding Semi-Annual Data
	Dec17	Dec18	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial							-0.33	-0.39	0.66	2.04	-10.52

Zhixin Group Holding ROC % Calculation

Zhixin Group Holding'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 )
=	31.314 * ( 1 - 28.37% )	/	( (998.221	+	1018.295)	/ 2 )
=	22.4302182	/	1008.258
=	2.22 %

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	))
=	1546.76	-	529.015	-	( 19.524	-	max(0, 831.579	-	876.034	+	19.524	))
=	998.221

	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	))
=	1479.059	-	437.728	-	( 28.293	-	max(0, 784.819	-	807.855	+	28.293	))
=	1018.295

Zhixin Group Holding'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 )
=	12.806 * ( 1 - 930.26% )	/	( (1018.295	+	1002.108)	/ 2 )
=	-106.3230956	/	1010.2015
=	-10.52 %

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	))
=	1479.059	-	437.728	-	( 28.293	-	max(0, 784.819	-	807.855	+	28.293	))
=	1018.295

	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	))
=	1367.907	-	361.047	-	( 28.218	-	max(0, 690.859	-	695.611	+	28.218	))
=	1002.108

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

Zhixin Group Holding (HKSE:02187) 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, Zhixin Group Holding's WACC % is 3.36%. Zhixin Group Holding's ROC % is -1.19% (calculated using TTM income statement data). Zhixin Group Holding 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.

Zhixin Group Holding ROC % Related Terms

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Zhixin Group Holding Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Building Materials » Zhixin Group Holding Ltd (HKSE:02187) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

ZHIXF:USA

Address

1.No. 55, Guankou Avenue, Jimei District, Fujian Province, Xiamen, CHN

Website

http://www.xiamenzhixin.com

Zhixin Group Holding Ltd is a manufacturer and supplier of concrete-based building materials. The principal products of the company are ready-mixed concrete and precast concrete components. In addition, the Group is also engaged in solid waste processing and sales of eco-friendly construction materials. The company's operating segments are (i) Ready-mixed concrete, (ii) Precast concrete components, and (iii) Tailings recycling and bricks. The majority of revenue is from the Ready-mixed concrete segment.

Executives

Huatai Securities Co., Ltd.	2201 Interest of corporation controlled by you
Yeung Man	2101 Beneficial owner
Lai Yiyang	2101 Beneficial owner
Hong Wei	2202 Interest of your spouse
Ye Zhijie	2201 Interest of corporation controlled by you
Zhixin Investment Holding Limited	2101 Beneficial owner
Huang Wengui	2201 Interest of corporation controlled by you
Lin Lingling	2202 Interest of your spouse
Yaohe Holding Limited	2101 Beneficial owner

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