SUHJF (Sun Hung Kai Properties) ROC % : 3.02% (As of Jun. 2024)

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What is Sun Hung Kai Properties 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 %. Sun Hung Kai Properties's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 3.02%.

As of today (2024-12-15), Sun Hung Kai Properties's WACC % is 5.95%. Sun Hung Kai Properties's ROC % is 2.73% (calculated using TTM income statement data). Sun Hung Kai Properties earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Sun Hung Kai Properties ROC % Historical Data

The historical data trend for Sun Hung Kai Properties'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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Sun Hung Kai Properties ROC % Chart

Sun Hung Kai Properties Annual Data

Trend

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROC %

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3.94

3.82

3.63

3.13

2.75

Sun Hung Kai Properties 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															3.65	2.42	3.82	2.40	3.02

Sun Hung Kai Properties ROC % Calculation

Sun Hung Kai Properties's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	3199.232 * ( 1 - 16.87% )	/	( (95845.526	+	97681.178)	/ 2 )
=	2659.5215616	/	96763.352
=	2.75 %

where

	Invested Capital		(A: Jun. 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	))
=	102896.847	-	5022.724	-	( 2028.597	-	max(0, 6819.099	-	30994.893	+	2028.597	))
=	95845.526

	Invested Capital		(A: 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	))
=	104749.552	-	4895.647	-	( 2172.727	-	max(0, 7940.077	-	31839.052	+	2172.727	))
=	97681.178

Sun Hung Kai Properties'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 )
=	3693.47 * ( 1 - 19.75% )	/	( (98718.661	+	97681.178)	/ 2 )
=	2964.009675	/	98199.9195
=	3.02 %

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	))
=	104501.396	-	4674.64	-	( 1108.095	-	max(0, 8334.656	-	31333.069	+	1108.095	))
=	98718.661

	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	))
=	104749.552	-	4895.647	-	( 2172.727	-	max(0, 7940.077	-	31839.052	+	2172.727	))
=	97681.178

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

Sun Hung Kai Properties (OTCPK:SUHJF) 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, Sun Hung Kai Properties's WACC % is 5.95%. Sun Hung Kai Properties's ROC % is 2.73% (calculated using TTM income statement data). Sun Hung Kai Properties 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.

Sun Hung Kai Properties ROC % Related Terms

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Sun Hung Kai Properties Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Sun Hung Kai Properties Ltd (OTCPK:SUHJF) » Definitions » ROC %

Traded in Other Exchanges

SUHJY:USA 00016:Hong Kong SHG:Germany

Address

30 Harbour Road, 45th Floor, Sun Hung Kai Centre, Hong Kong, HKG

Website

https://www.shkp.com

Sun Hung Kai Properties is a diversified real estate developer in Hong Kong with a core focus on the residential, retail and office real estate segment. Most of its business is based in Hong Kong where it is a leading private housing developer and holds a portfolio of high-quality retail and office assets for rental income. The company also invests in other listed entities, including telecommunication company, SmarTone and data center provider, SUNeVision. The Kwok family is the controlling shareholder, with a stake of more than 40%.