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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Longyan Kaolin Clay Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 4.59%.
As of today (2026-08-01), Longyan Kaolin Clay Co's WACC % is 12.00%. Longyan Kaolin Clay Co's ROC % is 7.74% (calculated using TTM income statement data).
Longyan Kaolin Clay Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Longyan Kaolin Clay Co (SHSE:605086) 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, Longyan Kaolin Clay Co's WACC % is 12.00%. Longyan Kaolin Clay Co's ROC % is 7.74% (calculated using TTM income statement data).
Longyan Kaolin Clay 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.
* 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.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* 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.
Longyan Kaolin Clay Co (SHSE:605086) has a ROC % of 4.59% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Longyan Kaolin Clay Co and its competitors.
Is Longyan Kaolin Clay Co's ROC % too high?
Longyan Kaolin Clay Co's current ROC % is 4.59%. Overall, Longyan Kaolin Clay Co has a GF Score™ of 78/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Longyan Kaolin Clay Co's ROC % compare to competitors?
Longyan Kaolin Clay Co's ROC % of 4.59% can be compared against companies in the Metals & Mining industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Metals & Mining company?
A good ROC % depends on the Metals & Mining industry context. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Longyan Kaolin Clay Co and its competitors. Longyan Kaolin Clay Co's current ROC % is 4.59%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Longyan Kaolin Clay Co stock overvalued right now?
Based on GuruFocus' analysis, Longyan Kaolin Clay Co (SHSE:605086) is currently considered Fairly Valued. The stock's GF Value™ is ¥21.25, compared to a current price of ¥22.46 — trading 5.7% above its estimated fair value. The current ROC % is 4.59%. Longyan Kaolin Clay Co's overall GF Score™ is 78/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Longyan Kaolin Clay Co (SHSE:605086), the current ROC % is 4.59% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Longyan Kaolin Clay Co (SHSE:605086) Overvalued in 2026?
Based on GuruFocus' analysis, Longyan Kaolin Clay Co stock appears to be overvalued.
The current stock price of ¥22.46 is trading 5.7% above its estimated GF Value™ of ¥21.25.
GuruFocus considers Longyan Kaolin Clay Co to be Fairly Valued.
Key valuation signals for SHSE:605086:
ROC %: 4.59%
GF Value™: ¥21.25 vs. price of ¥22.46 (5.7% above fair value)
No single metric tells the full story. See the SHSE:605086 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Longyan Kaolin Clay Co Ltd is engaged in the selection, processing and sales of kaolin. The company's main products are kaolin ore, 325 mesh kaolin concentrate, super Longyan kaolin, and modified kaolin. The products have the characteristics of low iron, titanium and other harmful impurities, high firing whiteness, and good ceramic performance. It is widely used in daily ceramics, arts and crafts ceramics and high-end architectural ceramics.
78GF Score
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ROC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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