ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Zhong Hua International Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2023 was -0.03%.
As of today (2024-06-24), Zhong Hua International Holdings's WACC % is 3.49%. Zhong Hua International Holdings's ROIC % is 0.06% (calculated using TTM income statement data).
Zhong Hua International Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Zhong Hua International Holdings ROIC % Historical Data
* 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.
Competitive Comparison of Zhong Hua International Holdings's ROIC %
For the Real Estate - Development subindustry, Zhong Hua International Holdings'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.
Zhong Hua International Holdings's ROIC % Distribution in the Real Estate Industry
For the Real Estate industry and Real Estate sector, Zhong Hua International Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where Zhong Hua International Holdings's ROIC % falls into.
Zhong Hua International Holdings ROIC % Calculation
Zhong Hua International Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:
Note:
The Operating Income data used here is two times the semi-annual (Jun. 2023) data.
* 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.
Zhong Hua International Holdings (HKSE:01064) 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, Zhong Hua International Holdings's WACC % is 3.49%. Zhong Hua International Holdings's ROIC % is 0.06% (calculated using TTM income statement data).
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.
Zhong Hua International Holdings ROIC % Related Terms
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Zhong Hua International Holdings (HKSE:01064) Business Description
Zhong Hua International Holdings Ltd is an investment holding company. Through its subsidiaries, it is engaged in property development, holding, and management activity. The business activity of the group functions through the Property investment and development segment; and Corporate and other segments. The Property Investment and development segment is engaged in the investment in properties located in Mainland China to generate potential income from letting. The Corporate and Others segment is involved in the provision of management services to group companies. It derives key revenue from the Property investment and development segment. The group mainly derives revenue from customers based in Mainland China.
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