China Aoyuan Group (HKSE:03883) ROC % : -1.40% (As of Jun. 2024)

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What is China Aoyuan Group 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 %. China Aoyuan Group's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was -1.40%.

As of today (2025-03-03), China Aoyuan Group's WACC % is 2.55%. China Aoyuan Group's ROC % is -2.90% (calculated using TTM income statement data). China Aoyuan Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China Aoyuan Group ROC % Historical Data

The historical data trend for China Aoyuan Group'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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China Aoyuan Group ROC % Chart

China Aoyuan Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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3.68

3.13

-9.02

-1.34

-3.19

China Aoyuan Group Semi-Annual Data
	Dec14	Jun15	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															-1.51	-1.15	-0.80	-5.75	-1.40

China Aoyuan Group ROC % Calculation

China Aoyuan Group'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 )
=	-4954.353 * ( 1 - -23.37% )	/	( (212402.734	+	171123.622)	/ 2 )
=	-6112.1852961	/	191763.178
=	-3.19 %

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	))
=	261786.836	-	82739.408	-	( 5783.118	-	max(0, 267155.76	-	233800.454	+	5783.118	))
=	212402.734

	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	))
=	218068.324	-	85327.736	-	( 2066.616	-	max(0, 232868.969	-	194485.935	+	2066.616	))
=	171123.622

China Aoyuan Group'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 )
=	-2073.472 * ( 1 - 2.35% )	/	( (171123.622	+	119027.763)	/ 2 )
=	-2024.745408	/	145075.6925
=	-1.40 %

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	))
=	218068.324	-	85327.736	-	( 2066.616	-	max(0, 232868.969	-	194485.935	+	2066.616	))
=	171123.622

	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	))
=	203073.019	-	82290.218	-	( 1755.038	-	max(0, 177274.989	-	180854.663	+	1755.038	))
=	119027.763

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

China Aoyuan Group (HKSE:03883) 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, China Aoyuan Group's WACC % is 2.55%. China Aoyuan Group's ROC % is -2.90% (calculated using TTM income statement data). China Aoyuan Group 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.

China Aoyuan Group ROC % Related Terms

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China Aoyuan Group Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » China Aoyuan Group Ltd (HKSE:03883) » Definitions » ROC %

Traded in Other Exchanges

47C:Germany

Address

Huangpu Avenue West, No. 108, Aoyuan Mansion, Tianhe District, Guangzhou, CHN

Website

https://www.aoyuan.com.cn

China Aoyuan Group Ltd is principally engaged in the sales of properties. The company operates its business through three segments. The Property Development segment is engaged in the development and sale of properties. The Property Investment segment is engaged in the leasing of investment properties. The Others segment is engaged in hotel operations, the provision of consulting and management services. Through its subsidiaries, the company is also engaged in the construction business. The company derives maximum revenue from property development.

Executives

Jiang Miner
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