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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 Merchants Land's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 1.32%.
As of today (2026-07-19), China Merchants Land's WACC % is 1.68%. China Merchants Land's ROIC % is 0.57% (calculated using TTM income statement data).
China Merchants Land earns returns that do not match up to its cost of capital. It will destroy value as it grows.
China Merchants Land (HKSE:00978) 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 Merchants Land's WACC % is 1.68%. China Merchants Land's ROIC % is 0.57% (calculated using TTM income statement data).
China Merchants Land 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 Real Estate - Diversified subindustry, China Merchants Land'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 Merchants Land ROIC % vs Real Estate Industry
For the Real Estate industry and Real Estate sector, China Merchants Land's ROIC % distribution charts can be found below:
* The bar in red indicates where China Merchants Land'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.
China Merchants Land (HKSE:00978) has a ROIC % of 1.32% 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 China Merchants Land and its competitors.
Is China Merchants Land's ROIC % too high?
China Merchants Land's current ROIC % is 1.32%. The Real Estate industry median ROIC % is 2.17. China Merchants Land's value of 1.32% is 39.2% below this industry median. Overall, China Merchants Land has a GF Score™ of 43/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does China Merchants Land's ROIC % compare to competitors?
China Merchants Land's ROIC % of 1.32% can be compared against companies in the Real Estate industry. The industry median ROIC % is 2.17. China Merchants Land's value of 1.32% is 39.2% 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 Real Estate company?
The median ROIC % among Real Estate companies is 2.17, based on 1,755 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. China Merchants Land's current ROIC % of 1.32% is 39.2% 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 China Merchants Land and its competitors. For the Real Estate industry, the median ROIC % is 2.17 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. China Merchants Land's current ROIC % is 1.32%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is China Merchants Land stock overvalued right now?
Based on GuruFocus' analysis, China Merchants Land (HKSE:00978) is currently considered Modestly Undervalued. The stock's GF Value™ is HK$0.32, compared to a current price of HK$0.24 — trading 25.3% below its estimated fair value. The current ROIC % is 1.32% and 39.2% below the Real Estate industry median of 2.17. China Merchants Land's overall GF Score™ is 43/100 with 8 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 Merchants Land (HKSE:00978), the current ROIC % is 1.32% 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 China Merchants Land (HKSE:00978) Overvalued in 2026?
Based on GuruFocus' analysis, China Merchants Land stock appears to be undervalued.
The current stock price of HK$0.24 is trading 25.3% below its estimated GF Value™ of HK$0.32.
GuruFocus considers China Merchants Land to be Modestly Undervalued.
Key valuation signals for HKSE:00978:
ROIC %: 1.32%
GF Value™: HK$0.32 vs. price of HK$0.24 (25.3% below fair value)
Industry Position: 39.2% below the Real Estate median
No single metric tells the full story. See the HKSE:00978 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
China Merchants Land Ltd is an investment holding company. The company is principally engaged in the development, sale, lease, investment and management of properties; assets management; and investment holding activities. The company has two operating segment Development and sales of properties and property leasing (Properties Segment); and Asset management for office premises and shopping malls (Asset Management Segment). The company generated majority of revenue from Properties Segment. The company has presence in Foshan, Guangzhou, Nanjing and Jurong, Chongqing, Xi'an, and Hong Kong.
43GF Score
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