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Perennial Energy Holdings (HKSE:02798) ROC % : 14.60% (As of Jun. 2024)


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What is Perennial Energy 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 %. Perennial Energy Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 14.60%.

As of today (2024-12-14), Perennial Energy Holdings's WACC % is 6.73%. Perennial Energy Holdings's ROC % is 17.20% (calculated using TTM income statement data). Perennial Energy Holdings generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.


Perennial Energy Holdings ROC % Historical Data

The historical data trend for Perennial Energy 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.

* Premium members only.

Perennial Energy Holdings ROC % Chart

Perennial Energy Holdings Annual Data
Trend Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROC %
Get a 7-Day Free Trial Premium Member Only 17.99 19.91 21.36 25.34 16.08

Perennial Energy Holdings Semi-Annual Data
Dec15 Dec16 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23 Jun24
ROC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 27.50 24.00 9.54 20.42 14.60

Perennial Energy Holdings ROC % Calculation

Perennial Energy 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 )
=812.088 * ( 1 - 16.69% )/( (4051.036 + 4365.945)/ 2 )
=676.5505128/4208.4905
=16.08 %

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))
=4556.201 - 839.938 - ( 225.64 - max(0, 1620.394 - 1285.621+225.64))
=4051.036

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))
=4735.239 - 565.799 - ( 142.148 - max(0, 1315.205 - 1118.7+142.148))
=4365.945

Perennial Energy 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 )
=798.552 * ( 1 - 15.39% )/( (4365.945 + 4887.401)/ 2 )
=675.6548472/4626.673
=14.60 %

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))
=4735.239 - 565.799 - ( 142.148 - max(0, 1315.205 - 1118.7+142.148))
=4365.945

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))
=5002.959 - 530.751 - ( 105.528 - max(0, 1474.478 - 1059.285+105.528))
=4887.401

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

* 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.


Perennial Energy Holdings  (HKSE:02798) 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, Perennial Energy Holdings's WACC % is 6.73%. Perennial Energy Holdings's ROC % is 17.20% (calculated using TTM income statement data). Perennial Energy Holdings generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.


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.


Perennial Energy Holdings ROC % Related Terms

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Perennial Energy Holdings Business Description

Traded in Other Exchanges
Address
Hongguo Economic Development Area, Office Building next to E' Lang Pu Leisure Square, Guizhou Province, Liupanshui, CHN
Perennial Energy Holdings Ltd is a coal mining company. Along with its subsidiaries, it is principally engaged in the exploration and mining of coking coal and coal refinery in the People's Republic of China. It operates three underground coal mines namely, Hongguo Coal Mine, Baogushan Coal Mine, and Xiejiahegou Coal Mine. The company earns revenue from the sale of Clean coking coal which accounts for the majority of the revenue, Raw coal, Middling coal, Sludge coal, and sales of of coalbed methane gas.
Executives
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Yu Bang Ping
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Leung Ka Hung

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