ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Hong Kong and China Gas Co's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 3.37%.
As of today (2026-06-28), Hong Kong and China Gas Co's WACC % is 5.07%. Hong Kong and China Gas Co's ROIC % is 3.89% (calculated using TTM income statement data).
Hong Kong and China Gas Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Hong Kong and China Gas Co (OTCPK:HOKCF) 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, Hong Kong and China Gas Co's WACC % is 5.07%. Hong Kong and China Gas Co's ROIC % is 3.89% (calculated using TTM income statement data).
Hong Kong and China Gas Co 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 Utilities - Regulated Gas subindustry, Hong Kong and China Gas Co'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.
Hong Kong and China Gas Co ROIC % vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Hong Kong and China Gas Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Hong Kong and China Gas Co'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.
Hong Kong and China Gas Co (HOKCF) has a ROIC % of 3.37% 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 Hong Kong and China Gas Co and its competitors.
Is Hong Kong and China Gas Co's ROIC % too high?
Hong Kong and China Gas Co's current ROIC % is 3.37%. The Utilities - Regulated industry median ROIC % is 4.18. Hong Kong and China Gas Co's value of 3.37% is 19.4% below this industry median. Overall, Hong Kong and China Gas Co has a GF Score™ of 52/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Hong Kong and China Gas Co's ROIC % compare to ATO and NI?
Hong Kong and China Gas Co's ROIC % of 3.37% can be compared against companies in the Utilities - Regulated industry. The industry median ROIC % is 4.18. Hong Kong and China Gas Co's value of 3.37% is 19.4% 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 an Utilities - Regulated company?
The median ROIC % among Utilities - Regulated companies is 4.18, based on 503 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. Hong Kong and China Gas Co's current ROIC % of 3.37% is 19.4% 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 Hong Kong and China Gas Co and its competitors. For the Utilities - Regulated industry, the median ROIC % is 4.18 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Hong Kong and China Gas Co's current ROIC % is 3.37%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Hong Kong and China Gas Co stock overvalued right now?
Based on GuruFocus' analysis, Hong Kong and China Gas Co (HOKCF) is currently considered Fairly Valued. The stock's GF Value™ is $0.84, compared to a current price of $0.90 — trading 7.5% above its estimated fair value. The current ROIC % is 3.37% and 19.4% below the Utilities - Regulated industry median of 4.18. Hong Kong and China Gas Co's overall GF Score™ is 52/100 with 7 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 Hong Kong and China Gas Co (HOKCF), the current ROIC % is 3.37% 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 Hong Kong and China Gas Co (HOKCF) Overvalued in 2026?
Based on GuruFocus' analysis, Hong Kong and China Gas Co stock appears to be overvalued.
The current stock price of $0.90 is trading 7.5% above its estimated GF Value™ of $0.84.
GuruFocus considers Hong Kong and China Gas Co to be Fairly Valued.
Key valuation signals for HOKCF:
ROIC %: 3.37%
GF Value™: $0.84 vs. price of $0.90 (7.5% above fair value)
Industry Position: 19.4% below the Utilities - Regulated median
No single metric tells the full story. See the HOKCF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Hong Kong and China Gas Co Ltd, is the oldest public utility company in Hong Kong. The company's core business comprises the production and distribution of town gas in Hong Kong, with a monopoly on distribution and retail. The company is also investing in water, upstream gas, and new energies. The Group's principal activities are the production, distribution, and marketing of gas and related products or services, water supply and waste treatment, renewable energy businesses, extended businesses, and fuels businesses (Green Fuels) in Hong Kong and the Chinese mainland. The company operates in three segments: Gas, water and waste treatment, renewable energy, extended businesses, and related businesses, Green Fuels, and Property.
52GF Score
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