Hong Lai Huat Group (SGX:CTO) ROIC % : -3.17% (As of Jun. 2024)

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What is Hong Lai Huat Group 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 %. Hong Lai Huat Group's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2024 was -3.17%.

As of today (2024-12-11), Hong Lai Huat Group's WACC % is 9.97%. Hong Lai Huat Group's ROIC % is -4.60% (calculated using TTM income statement data). Hong Lai Huat Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Hong Lai Huat Group ROIC % Historical Data

The historical data trend for Hong Lai Huat Group'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.

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Hong Lai Huat Group ROIC % Chart

Hong Lai Huat Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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2.98

-5.52

2.03

-4.73

-4.77

Hong Lai Huat Group Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROIC %	Get a 7-Day Free Trial															-6.13	-3.91	-3.13	-6.06	-3.17

Competitive Comparison of Hong Lai Huat Group's ROIC %

For the Real Estate - Development subindustry, Hong Lai Huat Group'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 Lai Huat Group's ROIC % Distribution in the Real Estate Industry

For the Real Estate industry and Real Estate sector, Hong Lai Huat Group's ROIC % distribution charts can be found below:

* The bar in red indicates where Hong Lai Huat Group's ROIC % falls into.

Hong Lai Huat Group ROIC % Calculation

Hong Lai Huat Group's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-6.79 * ( 1 - 8.47% )	/	( (136.821	+	123.544)	/ 2 )
=	-6.214887	/	130.1825
=	-4.77 %

where

	Invested Capital		(A: Dec. 2022 )
=	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	))
=	155.822	-	7.366	-	( 11.635	-	max(0, 12.13	-	62.662	+	11.635	))
=	136.821

	Invested Capital		(A: Dec. 2023 )
=	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	))
=	132.509	-	4.99	-	( 3.975	-	max(0, 10.961	-	51.636	+	3.975	))
=	123.544

Hong Lai Huat Group's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROIC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-4.04 * ( 1 - 5.25% )	/	( (123.544	+	117.858)	/ 2 )
=	-3.8279	/	120.701
=	-3.17 %

where

	Invested Capital		(Q: Dec. 2023 )
=	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	))
=	132.509	-	4.99	-	( 3.975	-	max(0, 10.961	-	51.636	+	3.975	))
=	123.544

	Invested Capital		(Q: Jun. 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	))
=	137.482	-	13.788	-	( 5.836	-	max(0, 21.477	-	105.024	+	5.836	))
=	117.858

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

Hong Lai Huat Group (SGX:CTO) 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 Lai Huat Group's WACC % is 9.97%. Hong Lai Huat Group's ROIC % is -4.60% (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.

Hong Lai Huat Group ROIC % Related Terms

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Hong Lai Huat Group Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Hong Lai Huat Group Ltd (SGX:CTO) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

10 Bukit Batok Crescent, No 13-05, The Spire Building, Singapore, SGP, 658079

Website

https://www.honglaihuatgroup.com

Hong Lai Huat Group Ltd is engaged in the agricultural development, cultivation, branding, and merchandising, distribution of cassava. The company is also engaged in the development of commercial and residential properties. The reportable segments of the company are the Agriculture division, Property Development and Real estate division, and Others. The agriculture division carries on the business of agricultural development, cultivation, branding, merchandising, and distribution of cassava. The property development and real estate division, are carrying on the business of investment and prime development of commercial and residential properties. The company earns the majority of its revenue from the agriculture division.