ZhongTongGuoMai Communication Co (SHSE:603559) ROC % : -2.04% (As of Sep. 2024)

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What is ZhongTongGuoMai Communication 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 %. ZhongTongGuoMai Communication Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -2.04%.

As of today (2025-04-03), ZhongTongGuoMai Communication Co's WACC % is 7.40%. ZhongTongGuoMai Communication Co's ROC % is -6.85% (calculated using TTM income statement data). ZhongTongGuoMai Communication Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

ZhongTongGuoMai Communication Co ROC % Historical Data

The historical data trend for ZhongTongGuoMai Communication 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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ZhongTongGuoMai Communication Co ROC % Chart

ZhongTongGuoMai Communication Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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3.69

1.92

-1.66

-6.09

-8.70

ZhongTongGuoMai Communication Co Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															-3.65	-14.28	-4.60	-4.81	-2.04

ZhongTongGuoMai Communication Co ROC % Calculation

ZhongTongGuoMai Communication 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 )
=	-57.212 * ( 1 - 0.74% )	/	( (768.082	+	537.61)	/ 2 )
=	-56.7886312	/	652.846
=	-8.70 %

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	))
=	1231.072	-	427.533	-	( 35.457	-	max(0, 863.19	-	1083.895	+	35.457	))
=	768.082

	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	))
=	1105.874	-	513.256	-	( 55.008	-	max(0, 902.399	-	1012.394	+	55.008	))
=	537.61

ZhongTongGuoMai Communication Co's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	-9.54 * ( 1 - -0.21% )	/	( (496.566	+	439.848)	/ 2 )
=	-9.560034	/	468.207
=	-2.04 %

where

	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	))
=	1100.565	-	560.151	-	( 43.848	-	max(0, 931.262	-	1012.678	+	43.848	))
=	496.566

	Invested Capital		(Q: Sep. 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	))
=	1080.628	-	600.755	-	( 40.025	-	max(0, 921.751	-	996.304	+	40.025	))
=	439.848

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

ZhongTongGuoMai Communication Co (SHSE:603559) 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, ZhongTongGuoMai Communication Co's WACC % is 7.40%. ZhongTongGuoMai Communication Co's ROC % is -6.85% (calculated using TTM income statement data). ZhongTongGuoMai Communication Co 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.

ZhongTongGuoMai Communication Co ROC % Related Terms

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ZhongTongGuoMai Communication Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » ZhongTongGuoMai Communication Co Ltd (SHSE:603559) » Definitions » ROC %

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Address

No. 6399, Nanhu Road, Jilin Province, Changchun, CHN, 130012

Website

https://www.ztgmcom.com

ZhongTongGuoMai Communication Co Ltd is the communication technology service provider in China. The company undertakes the communication network engineering consulting, surveying and design and construction activities; and communication network system operation and maintenance services. The communication technology services provided by the company mainly include two types of communication network engineering services and communication network maintenance services. The network engineering service refers to the construction of communication lines and communication pipes at the network level such as the core network, the transmission network and the access network.

Executives

Wang Shi Chao	Director
Li Chun Tian	Director
Qu Guo Li	Supervisors
Zhang Jian Min	senior management
Zhou Cai Hua	Directors, senior managers
Zhang Xian Kun	Director
Meng Qi	senior management
Ma Si Long	Supervisors
Zhang Li Yan	senior management
Tang Zhi Yuan	Director
Yu Sheng Xiang	Director
Wang Zhen Gang	Director

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