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Royal Deluxe Holdings (HKSE:03789) ROIC % : 1.24% (As of Mar. 2024)


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What is Royal Deluxe Holdings ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Royal Deluxe Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 1.24%.

As of today (2024-12-13), Royal Deluxe Holdings's WACC % is 5.37%. Royal Deluxe Holdings's ROIC % is -8.03% (calculated using TTM income statement data). Royal Deluxe Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Royal Deluxe Holdings ROIC % Historical Data

The historical data trend for Royal Deluxe Holdings'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.

* Premium members only.

Royal Deluxe Holdings ROIC % Chart

Royal Deluxe Holdings Annual Data
Trend Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22 Mar23 Mar24
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 11.09 12.75 2.15 6.79 2.20

Royal Deluxe Holdings Semi-Annual Data
Mar14 Mar15 Mar16 Sep16 Mar17 Sep17 Mar18 Sep18 Mar19 Sep19 Mar20 Sep20 Mar21 Sep21 Mar22 Sep22 Mar23 Sep23 Mar24 Sep24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 11.17 1.65 3.19 1.24 -7.33

Competitive Comparison of Royal Deluxe Holdings's ROIC %

For the Engineering & Construction subindustry, Royal Deluxe 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.


Royal Deluxe Holdings's ROIC % Distribution in the Construction Industry

For the Construction industry and Industrials sector, Royal Deluxe Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Royal Deluxe Holdings's ROIC % falls into.



Royal Deluxe Holdings ROIC % Calculation

Royal Deluxe Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2024 is calculated as:

ROIC % (A: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Mar. 2023 ) + Invested Capital (A: Mar. 2024 ))/ count )
=8.03 * ( 1 - 27.08% )/( (257.82 + 275.565)/ 2 )
=5.855476/266.6925
=2.20 %

where

Invested Capital(A: Mar. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=479.997 - 116.215 - ( 88.217 - max(0, 162.252 - 412.103+88.217))
=275.565

Royal Deluxe Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

ROIC % (Q: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Sep. 2023 ) + Invested Capital (Q: Mar. 2024 ))/ count )
=4.196 * ( 1 - 19.51% )/( (270.492 + 275.565)/ 2 )
=3.3773604/273.0285
=1.24 %

where

Invested Capital(Q: Mar. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=479.997 - 116.215 - ( 88.217 - max(0, 162.252 - 412.103+88.217))
=275.565

Note: The Operating Income data used here is two times the semi-annual (Mar. 2024) 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.


Royal Deluxe Holdings  (HKSE:03789) 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, Royal Deluxe Holdings's WACC % is 5.37%. Royal Deluxe Holdings's ROIC % is -8.03% (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.


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Royal Deluxe Holdings Business Description

Traded in Other Exchanges
N/A
Address
10 Shing Yip Street, Unit A, 22nd Floor, T G Place, Kwun Tong, Kowloon, Hong Kong, HKG
Royal Deluxe Holdings Ltd is a subcontractor engaged in providing formwork erection as well as related ancillary services. The company also offers fit-out services. The majority of the operations of the group are located in Hong Kong and generate a majority of revenue from the provision of formwork erection and related ancillary services.
Executives
Chao Lai Heng 2201 Interest of corporation controlled by you
Wang Kei Ming 2201 Interest of corporation controlled by you
Wang K M Limited 2101 Beneficial owner

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