Hospital of China (HKSE:03869) ROC % : 3.68% (As of Jun. 2024)

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What is Hospital of China 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 %. Hospital of China's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 3.68%.

As of today (2025-03-29), Hospital of China's WACC % is 2.15%. Hospital of China's ROC % is 1.42% (calculated using TTM income statement data). Hospital of China earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Hospital of China ROC % Historical Data

The historical data trend for Hospital of China'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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Hospital of China ROC % Chart

Hospital of China Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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2.67

4.50

4.01

2.34

3.91

Hospital of China Semi-Annual Data
	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													4.04	2.06	4.92	-3.25	3.68

Hospital of China ROC % Calculation

Hospital of China'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 )
=	136.933 * ( 1 - 22.14% )	/	( (3177.771	+	2272.994)	/ 2 )
=	106.6160338	/	2725.3825
=	3.91 %

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	))
=	2719.83	-	594.804	-	( 700.856	-	max(0, 1994.15	-	941.405	+	700.856	))
=	3177.771

	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	))
=	2732.369	-	213.172	-	( 730.525	-	max(0, 792.344	-	1038.547	+	730.525	))
=	2272.994

Hospital of China'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 )
=	243.31 * ( 1 - 58.51% )	/	( (2272.994	+	3211.33)	/ 2 )
=	100.949319	/	2742.162
=	3.68 %

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	))
=	2732.369	-	213.172	-	( 730.525	-	max(0, 792.344	-	1038.547	+	730.525	))
=	2272.994

	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	))
=	2684.487	-	193.805	-	( 730.265	-	max(0, 1753.609	-	1032.961	+	730.265	))
=	3211.33

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

Hospital of China (HKSE:03869) 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, Hospital of China's WACC % is 2.15%. Hospital of China's ROC % is 1.42% (calculated using TTM income statement data). Hospital of China 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.

Hospital of China ROC % Related Terms

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Hospital of China Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » Hospital Corporation of China Ltd (HKSE:03869) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

No.40, Xiaoyun Road, 4th Floor, Air China Century Plaza, Chaoyang District, Beijing, CHN

Website

http://www.hcclhealthcare.com

Hospital Corporation of China Ltd is an investment holding company that operates and manages hospitals in the People's Republic of China. In addition to offering hospital management services, it also provides supply chain services, other ancillary services to certain hospitals, and sells pharmaceutical products. The company has three operating segments, namely, Hospital management services, General hospital services, and the sale of pharmaceutical products. The Hospital management services segment is the primary revenue generator for the company.

Executives

Zhao John Huan	2201 Interest of corporation controlled by you
Exponential Fortune Group Limited	2106 Person having a security interest in shares
Hony Group Management Limited	2106 Person having a security interest in shares
Hony Managing Partners Limited	2106 Person having a security interest in shares
Lian Xiang Kong Gu Gu Fen You Xian Gong Si	2201 Interest of corporation controlled by you
Li Tao You Xian Gong Si	2101 Beneficial owner
Hony Capital Fund Viii (cayman), L.p.	2101 Beneficial owner
Hony Capital Fund Viii Gp (cayman) Limited	2201 Interest of corporation controlled by you
Hony Capital Fund Viii Gp (cayman), L.p.	2201 Interest of corporation controlled by you
Hony Capital Fund V Gp Limited	2201 Interest of corporation controlled by you
Hony Capital Fund V Gp, L.p.	2201 Interest of corporation controlled by you
Hony Capital Fund V, L.p.	2201 Interest of corporation controlled by you
Yu Feng You Xian Gong Si	2101 Beneficial owner
An Hui Zhong An Jian Kang Tou Zi Guan Li You Xian Gong Si	2201 Interest of corporation controlled by you

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