New Hope Service Holdings (HKSE:03658) ROC % : 40.45% (As of Jun. 2024)

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What is New Hope Service 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 %. New Hope Service Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 40.45%.

As of today (2025-03-28), New Hope Service Holdings's WACC % is 11.28%. New Hope Service Holdings's ROC % is 38.42% (calculated using TTM income statement data). New Hope Service 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.

New Hope Service Holdings ROC % Historical Data

The historical data trend for New Hope Service 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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New Hope Service Holdings ROC % Chart

New Hope Service Holdings Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Dec24

ROC %

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14.82

42.35

37.64

36.94

37.55

New Hope Service Holdings Semi-Annual Data
	Dec18	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24	Dec24
ROC %	Get a 7-Day Free Trial							33.19	37.54	38.53	40.45	37.22

New Hope Service Holdings ROC % Calculation

New Hope Service 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 )
=	304.306 * ( 1 - 15.25% )	/	( (722.544	+	673.652)	/ 2 )
=	257.899335	/	698.098
=	36.94 %

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	))
=	2032.337	-	333.014	-	( 1161.093	-	max(0, 635.41	-	1612.189	+	1161.093	))
=	722.544

	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	))
=	2144.579	-	479.681	-	( 1252.672	-	max(0, 705.449	-	1696.695	+	1252.672	))
=	673.652

New Hope Service 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 )
=	327.324 * ( 1 - 16.71% )	/	( (673.652	+	674.354)	/ 2 )
=	272.6281596	/	674.003
=	40.45 %

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	))
=	2144.579	-	479.681	-	( 1252.672	-	max(0, 705.449	-	1696.695	+	1252.672	))
=	673.652

	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	))
=	2172.051	-	493.167	-	( 1082.647	-	max(0, 726.97	-	1731.5	+	1082.647	))
=	674.354

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

New Hope Service Holdings (HKSE:03658) 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, New Hope Service Holdings's WACC % is 11.28%. New Hope Service Holdings's ROC % is 38.42% (calculated using TTM income statement data). New Hope Service 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.

New Hope Service Holdings ROC % Related Terms

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New Hope Service Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » New Hope Service Holdings Ltd (HKSE:03658) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

248 Queen’s Road East, 40th Floor, Dah Sing Financial Centre, Jinjiang District, Chengdu, Wanchai, CHN, 610000

Website

https://www.newhopeservice.com.cn

New Hope Service Holdings Ltd is a Chinese comprehensive property management and livelihood service operator, providing property management services, nonprofit Owner's value-added services, commercial operation services, and life services.

Executives

Chen Jing	2201 Interest of corporation controlled by you
Li Wei	2202 Interest of your spouse
Huang Kun	2201 Interest of corporation controlled by you
Jiang Mengjun	2201 Interest of corporation controlled by you
New Range Development Limited	2201 Interest of corporation controlled by you
New Voyage Development Limited	2101 Beneficial owner
Tmf Trust (hk) Limited	2301 Trustee
Wu Min	2201 Interest of corporation controlled by you
Zhang Minggui	2201 Interest of corporation controlled by you
Liu Chang	2307 Founder of a discretionary trust who can infl
Liu Yonghao	2201 Interest of corporation controlled by you
Medea Investments Limited	2201 Interest of corporation controlled by you
New Prosperity Development Limited	2201 Interest of corporation controlled by you
Sea Glory Developments Limited	2201 Interest of corporation controlled by you
Vistra Trust (singapore) Pte. Limited	2301 Trustee

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