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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 %. Dongguang Chemical's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 7.40%.
As of today (2026-07-16), Dongguang Chemical's WACC % is 3.09%. Dongguang Chemical's ROIC % is 8.36% (calculated using TTM income statement data).
Dongguang Chemical generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
Dongguang Chemical (HKSE:01702) 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, Dongguang Chemical's WACC % is 3.09%. Dongguang Chemical's ROIC % is 8.36% (calculated using TTM income statement data).
Dongguang Chemical generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
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.
Dongguang Chemical ROIC % Related Terms
Dongguang Chemical ROIC % Historical Data
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The historical data trend for Dongguang Chemical'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 Chemicals subindustry, Dongguang Chemical'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.
Dongguang Chemical ROIC % vs Chemicals Industry
For the Chemicals industry and Basic Materials sector, Dongguang Chemical's ROIC % distribution charts can be found below:
* The bar in red indicates where Dongguang Chemical'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.
Dongguang Chemical (HKSE:01702) has a ROIC % of 7.40% 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 Dongguang Chemical and its competitors.
Is Dongguang Chemical's ROIC % too high?
Dongguang Chemical's current ROIC % is 7.40%. The Chemicals industry median ROIC % is 4.48. Dongguang Chemical's value of 7.40% is 65.2% above this industry median. Overall, Dongguang Chemical has a GF Score™ of 79/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Dongguang Chemical's ROIC % compare to DOW?
Dongguang Chemical's ROIC % of 7.40% can be compared against companies in the Chemicals industry. The industry median ROIC % is 4.48. Dongguang Chemical's value of 7.40% is 65.2% above 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 Chemicals company?
The median ROIC % among Chemicals companies is 4.48, based on 1,578 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. Dongguang Chemical's current ROIC % of 7.40% is 65.2% above 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 Dongguang Chemical and its competitors. For the Chemicals industry, the median ROIC % is 4.48 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Dongguang Chemical's current ROIC % is 7.40%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Dongguang Chemical stock overvalued right now?
Based on GuruFocus' analysis, Dongguang Chemical (HKSE:01702) is currently considered Fairly Valued. The stock's GF Value™ is HK$1.59, compared to a current price of HK$1.44 — trading 9.4% below its estimated fair value. The current ROIC % is 7.40% and 65.2% above the Chemicals industry median of 4.48. Dongguang Chemical's overall GF Score™ is 79/100 with 4 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 Dongguang Chemical (HKSE:01702), the current ROIC % is 7.40% 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 Dongguang Chemical (HKSE:01702) Overvalued in 2026?
Based on GuruFocus' analysis, Dongguang Chemical stock appears to be undervalued.
The current stock price of HK$1.44 is trading 9.4% below its estimated GF Value™ of HK$1.59.
GuruFocus considers Dongguang Chemical to be Fairly Valued.
Key valuation signals for HKSE:01702:
ROIC %: 7.40%
GF Value™: HK$1.59 vs. price of HK$1.44 (9.4% below fair value)
Industry Position: 65.2% above the Chemicals median
No single metric tells the full story. See the HKSE:01702 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Dongguang Chemical Ltd is a coal-based urea producer. It produces and sells urea. Urea is the Group's main product, and the application of urea can be broadly categorised into agricultural and industrial uses. It is widely used as a source of nitrogen in fertilisers, and it has wide industrial applications, such as the production of adhesives, coatings, plastics, and cosmetics. The Group also produces and sells by-products of urea, including vehicle urea solution, methanol, liquid carbon dioxide, liquefied natural gas, liquid ammonia, and compound fertiliser. The Group has two active production plants with production technologies located in Dongguang County of Cangzhou City, Hebei Province.
79GF Score
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