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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 %. Guangdong Tianan New Material Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 3.28%.
As of today (2026-08-05), Guangdong Tianan New Material Co's WACC % is 9.38%. Guangdong Tianan New Material Co's ROIC % is 9.31% (calculated using TTM income statement data).
Guangdong Tianan New Material Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Guangdong Tianan New Material Co (SHSE:603725) 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, Guangdong Tianan New Material Co's WACC % is 9.38%. Guangdong Tianan New Material Co's ROIC % is 9.31% (calculated using TTM income statement data).
Guangdong Tianan New Material 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.
Guangdong Tianan New Material Co ROIC % Related Terms
Guangdong Tianan New Material Co 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.
For the Chemicals subindustry, Guangdong Tianan New Material 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.
Guangdong Tianan New Material Co ROIC % vs Chemicals Industry
For the Chemicals industry and Basic Materials sector, Guangdong Tianan New Material Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Guangdong Tianan New Material Co's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) 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.
Guangdong Tianan New Material Co (SHSE:603725) has a ROIC % of 3.28% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Guangdong Tianan New Material Co and its competitors.
Is Guangdong Tianan New Material Co's ROIC % too high?
Guangdong Tianan New Material Co's current ROIC % is 3.28%. The Chemicals industry median ROIC % is 4.54. Guangdong Tianan New Material Co's value of 3.28% is 27.8% below this industry median. Overall, Guangdong Tianan New Material Co has a GF Score™ of 69/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Guangdong Tianan New Material Co's ROIC % compare to DOW?
Guangdong Tianan New Material Co's ROIC % of 3.28% can be compared against companies in the Chemicals industry. The industry median ROIC % is 4.54. Guangdong Tianan New Material Co's value of 3.28% is 27.8% 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 a Chemicals company?
The median ROIC % among Chemicals companies is 4.54, based on 1,582 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. Guangdong Tianan New Material Co's current ROIC % of 3.28% is 27.8% 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 Guangdong Tianan New Material Co and its competitors. For the Chemicals industry, the median ROIC % is 4.54 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Guangdong Tianan New Material Co's current ROIC % is 3.28%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Guangdong Tianan New Material Co stock overvalued right now?
Based on GuruFocus' analysis, Guangdong Tianan New Material Co (SHSE:603725) is currently considered Significantly Overvalued. The stock's GF Value™ is ¥7.13, compared to a current price of ¥10.14 — trading 42.2% above its estimated fair value. The current ROIC % is 3.28% and 27.8% below the Chemicals industry median of 4.54. Guangdong Tianan New Material Co's overall GF Score™ is 69/100 with 3 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 Guangdong Tianan New Material Co (SHSE:603725), the current ROIC % is 3.28% as of Mar. 2026. 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 Guangdong Tianan New Material Co (SHSE:603725) Overvalued in 2026?
Based on GuruFocus' analysis, Guangdong Tianan New Material Co stock appears to be overvalued.
The current stock price of ¥10.14 is trading 42.2% above its estimated GF Value™ of ¥7.13.
GuruFocus considers Guangdong Tianan New Material Co to be Significantly Overvalued.
Key valuation signals for SHSE:603725:
ROIC %: 3.28%
GF Value™: ¥7.13 vs. price of ¥10.14 (42.2% above fair value)
Industry Position: 27.8% below the Chemicals median
No single metric tells the full story. See the SHSE:603725 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Guangdong Tianan New Material Co Ltd is a manufacturer of environmentally friendly high-end decorative materials and automotive interior materials in China. Its primary products include home decoration finishes, automotive interior finishes, films, and artificial leather products, such as polyvinyl chloride (PVC), polypropylene (PP), and thermoplastic polyolefin (TPO), and other polymer surface materials.
69GF Score
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