ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Xiamen Leading Optics Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 25.61%.
As of today (2026-07-02), Xiamen Leading Optics Co's WACC % is 12.86%. Xiamen Leading Optics Co's ROC % is 24.61% (calculated using TTM income statement data).
Xiamen Leading Optics 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.
Xiamen Leading Optics Co (SHSE:605118) 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, Xiamen Leading Optics Co's WACC % is 12.86%. Xiamen Leading Optics Co's ROC % is 24.61% (calculated using TTM income statement data).
Xiamen Leading Optics 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.
* 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.
Xiamen Leading Optics Co (SHSE:605118) has a ROC % of 25.61% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Xiamen Leading Optics Co and its competitors.
Is Xiamen Leading Optics Co's ROC % too high?
Xiamen Leading Optics Co's current ROC % is 25.61%. The Hardware industry median ROC % is 4.11. Xiamen Leading Optics Co's value of 25.61% is 523.1% above this industry median. Overall, Xiamen Leading Optics Co has a GF Score™ of 88/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Xiamen Leading Optics Co's ROC % compare to APH and GLW?
Xiamen Leading Optics Co's ROC % of 25.61% can be compared against companies in the Hardware industry. The industry median ROC % is 4.11. Xiamen Leading Optics Co's value of 25.61% is 523.1% above this benchmark. 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 Hardware company?
The median ROC % among Hardware companies is 4.11, based on 2,447 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Xiamen Leading Optics Co's current ROC % of 25.61% is 523.1% above the industry median. 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 Xiamen Leading Optics Co and its competitors. For the Hardware industry, the median ROC % is 4.11 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Xiamen Leading Optics Co's current ROC % is 25.61%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Xiamen Leading Optics Co stock overvalued right now?
Based on GuruFocus' analysis, Xiamen Leading Optics Co (SHSE:605118) is currently considered Modestly Overvalued. The stock's GF Value™ is ¥27.91, compared to a current price of ¥35.04 — trading 25.5% above its estimated fair value. The current ROC % is 25.61% and 523.1% above the Hardware industry median of 4.11. Xiamen Leading Optics Co's overall GF Score™ is 88/100 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 Xiamen Leading Optics Co (SHSE:605118), the current ROC % is 25.61% 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 Xiamen Leading Optics Co (SHSE:605118) Overvalued in 2026?
Based on GuruFocus' analysis, Xiamen Leading Optics Co stock appears to be overvalued.
The current stock price of ¥35.04 is trading 25.5% above its estimated GF Value™ of ¥27.91.
GuruFocus considers Xiamen Leading Optics Co to be Modestly Overvalued.
Key valuation signals for SHSE:605118:
ROC %: 25.61%
GF Value™: ¥27.91 vs. price of ¥35.04 (25.5% above fair value)
Industry Position: 523.1% above the Hardware median
No single metric tells the full story. See the SHSE:605118 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Xiamen Leading Optics Co Ltd is engaged in design, production and sales of optical lenses. The company's products include Surveillance Lens; Automotives Lens; Machine Vision Lens; ITS Lens; Low Distortion Lens; Consumer Imaging; and Panoramic Lens. Its products are used in multiple fields of application including security surveillance, medical and biological studies and researches, intelligent traffic systems, video conference, intelligent home security, sports camera and many more.
88GF Score
Get the complete analysis for SHSE:605118
ROC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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