ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. China Pharma Holding's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was -10.72%.
As of today (2026-07-10), China Pharma Holding's WACC % is 8.42%. China Pharma Holding's ROIC % is -13.21% (calculated using TTM income statement data).
China Pharma Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.
China Pharma Holding (AMEX:CPHI) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, China Pharma Holding's WACC % is 8.42%. China Pharma Holding's ROIC % is -13.21% (calculated using TTM income statement data).
China Pharma Holding 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 %, ROIC % 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.
For the Drug Manufacturers - Specialty & Generic subindustry, China Pharma Holding's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
China Pharma Holding ROIC % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, China Pharma Holding's ROIC % distribution charts can be found below:
* The bar in red indicates where China Pharma Holding's ROIC % falls into.
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.
China Pharma Holding (CPHI) has a ROIC % of -10.72% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on China Pharma Holding and its competitors.
Is China Pharma Holding's ROIC % too high?
China Pharma Holding's current ROIC % is -10.72%. Overall, China Pharma Holding has a GF Score™ of 26/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does China Pharma Holding's ROIC % compare to TXMD and RMTI?
China Pharma Holding's ROIC % of -10.72% can be compared against companies in the Drug Manufacturers industry. The industry median ROIC % is 4.50. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Drug Manufacturers company?
The median ROIC % among Drug Manufacturers companies is 4.50, based on 986 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % 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 ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on China Pharma Holding and its competitors. For the Drug Manufacturers industry, the median ROIC % is 4.50 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. China Pharma Holding's current ROIC % is -10.72%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is China Pharma Holding stock overvalued right now?
Based on GuruFocus' analysis, China Pharma Holding (CPHI) is currently considered Significantly Overvalued. The stock's GF Value™ is $0.24, compared to a current price of $0.57 — trading 137.5% above its estimated fair value. The current ROIC % is -10.72%. China Pharma Holding's overall GF Score™ is 26/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For China Pharma Holding (CPHI), the current ROIC % is -10.72% 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 China Pharma Holding (CPHI) Overvalued in 2026?
Based on GuruFocus' analysis, China Pharma Holding stock appears to be overvalued.
The current stock price of $0.57 is trading 137.5% above its estimated GF Value™ of $0.24.
GuruFocus considers China Pharma Holding to be Significantly Overvalued.
Key valuation signals for CPHI:
ROIC %: -10.72%
GF Value™: $0.24 vs. price of $0.57 (137.5% above fair value)
No single metric tells the full story. See the CPHI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
China Pharma Holding Inc is a drug manufacturing company. It is mainly engaged in the development, manufacture, and marketing of pharmaceutical products for human use in connection with a variety of high-incidence and high-mortality diseases and medical conditions prevalent in the People's Republic of China. The company mainly manufactures pharmaceutical products in the form of dry powder injectables, liquid injectables, tablets, capsules, and cephalosporin oral solutions. The product line of the company includes cefaclor dispersible tablets, clarithromycin granules, roxithromycin dispersible tablets, andrographolide tablets, ozagrel sodium for injection, gastrodin injection, and others.
26GF Score
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