Genes Tech Group Holdings Co (HKSE:08257) ROC % : 2.35% (As of Dec. 2023)

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What is Genes Tech Group Holdings Co 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 %. Genes Tech Group Holdings Co's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 2.35%.

As of today (2024-05-22), Genes Tech Group Holdings Co's WACC % is 4.57%. Genes Tech Group Holdings Co's ROC % is 5.29% (calculated using TTM income statement data). Genes Tech Group Holdings Co 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.

Genes Tech Group Holdings Co ROC % Historical Data

The historical data trend for Genes Tech Group Holdings Co'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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Genes Tech Group Holdings Co ROC % Chart

Genes Tech Group Holdings Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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10.34

7.66

4.37

-3.93

5.25

Genes Tech Group Holdings Co Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															-40.67	7.81	10.60	0.34	2.35

Genes Tech Group Holdings Co ROC % Calculation

Genes Tech Group Holdings Co'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 )
=	34.843 * ( 1 - 28.22% )	/	( (495.073	+	456.868)	/ 2 )
=	25.0103054	/	475.9705
=	5.25 %

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	))
=	630.738	-	74.79	-	( 60.875	-	max(0, 394.24	-	500.678	+	60.875	))
=	495.073

	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	))
=	525.514	-	30.976	-	( 37.67	-	max(0, 278.949	-	407.407	+	37.67	))
=	456.868

Genes Tech Group Holdings Co's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	17.68 * ( 1 - 39.22% )	/	( (0	+	456.868)	/ 1 )
=	10.745904	/	456.868
=	2.35 %

where

	Invested Capital		(Q: Sep. 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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

	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	))
=	525.514	-	30.976	-	( 37.67	-	max(0, 278.949	-	407.407	+	37.67	))
=	456.868

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Genes Tech Group Holdings Co (HKSE:08257) 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, Genes Tech Group Holdings Co's WACC % is 4.57%. Genes Tech Group Holdings Co's ROC % is 5.29% (calculated using TTM income statement data). Genes Tech Group Holdings Co 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.

Genes Tech Group Holdings Co ROC % Related Terms

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Genes Tech Group Holdings Co (HKSE:08257) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Genes Tech Group Holdings Co Ltd (HKSE:08257) » Definitions » ROC %

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Traded in Other Exchanges

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Address

No. 80, Baotai 3rd Road, Hsinchu County, Zhubei City, TWN, 30244

Website

http://www.genestech.com

Genes Tech Group Holdings Co Ltd is engaged in the business of Provision of turnkey solution and Trading of used semiconductor manufacturing equipment and parts. It generates prime revenue from the Provision of turnkey solution segment. The company offers turnkey solution of used SME and Parts to customers who need to alter and upgrade the semiconductors of production systems from time to time. The SME and parts supplied by the group include furnaces, clean tracks, and other related items, which are used at the front-end of the semiconductor manufacturing process, wafer fabrication, such as deposition, photoresist coating, and development. It has a business presence in Taiwan, the PRC, Singapore, the United States, Japan and other countries.

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