ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Luye Pharma Group's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 2.47%.
As of today (2026-07-03), Luye Pharma Group's WACC % is 7.70%. Luye Pharma Group's ROIC % is 3.77% (calculated using TTM income statement data).
Luye Pharma Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Luye Pharma Group (FRA:LUP) 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, Luye Pharma Group's WACC % is 7.70%. Luye Pharma Group's ROIC % is 3.77% (calculated using TTM income statement data).
Luye Pharma Group 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.
Luye Pharma Group ROIC % Related Terms
Luye Pharma Group ROIC % Historical Data
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The historical data trend for Luye Pharma Group's ROIC % 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.
For the Drug Manufacturers - Specialty & Generic subindustry, Luye Pharma Group'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.
Luye Pharma Group ROIC % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Luye Pharma Group's ROIC % distribution charts can be found below:
* The bar in red indicates where Luye Pharma Group's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2025) 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.
Luye Pharma Group (FRA:LUP) has a ROIC % of 2.47% as of Dec. 2025. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Luye Pharma Group and its competitors.
Is Luye Pharma Group's ROIC % too high?
Luye Pharma Group's current ROIC % is 2.47%. The Drug Manufacturers industry median ROIC % is 4.50. Luye Pharma Group's value of 2.47% is 45.1% below this industry median. Overall, Luye Pharma Group has a GF Score™ of 47/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Luye Pharma Group's ROIC % compare to ZTS and UTHR?
Luye Pharma Group's ROIC % of 2.47% can be compared against companies in the Drug Manufacturers industry. The industry median ROIC % is 4.50. Luye Pharma Group's value of 2.47% is 45.1% below this benchmark. 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 984 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. Luye Pharma Group's current ROIC % of 2.47% is 45.1% below 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 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 Luye Pharma Group 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. Luye Pharma Group's current ROIC % is 2.47%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Luye Pharma Group stock overvalued right now?
Based on GuruFocus' analysis, Luye Pharma Group (FRA:LUP) is currently considered Possible Value Trap. The stock's GF Value™ is €0.32, compared to a current price of €0.20 — trading 36.3% below its estimated fair value. The current ROIC % is 2.47% and 45.1% below the Drug Manufacturers industry median of 4.50. Luye Pharma Group's overall GF Score™ is 47/100 with 5 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 Luye Pharma Group (FRA:LUP), the current ROIC % is 2.47% as of Dec. 2025. 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 Luye Pharma Group (FRA:LUP) Overvalued in 2026?
Based on GuruFocus' analysis, Luye Pharma Group stock appears to be undervalued.
The current stock price of €0.20 is trading 36.3% below its estimated GF Value™ of €0.32.
GuruFocus considers Luye Pharma Group to be Possible Value Trap.
Key valuation signals for FRA:LUP:
ROIC %: 2.47%
GF Value™: €0.32 vs. price of €0.20 (36.3% below fair value)
Industry Position: 45.1% below the Drug Manufacturers median
No single metric tells the full story. See the FRA:LUP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Luye Pharma Group Ltd is a China-based drug manufacturer that focuses on development, production, marketing and sale of pharmaceutical products. The company develops drugs related to diagnosing and treating cancer, the cardiovascular system, the alimentary tract, and the central nervous system. The company develops drugs for world-wide use in Asia, Europe, and the United States. The Group organizes its business segments by type of products. Oncology drugs, which derives maximum revenue; Cardiovascular system drugs; Alimentary tract and metabolism drugs; Central nervous system drugs; and others. Geographically, the group derives maximum revenue from Chinese Mainland, while it also has its presence in Asia (other than the Chinese mainland), European Union, and Other countries.
47GF Score
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