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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 %. Chengdu Zhimingda Electronics Co's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2026 was 12.18%.
As of today (2026-09-02), Chengdu Zhimingda Electronics Co's WACC % is 16.65%. Chengdu Zhimingda Electronics Co's ROIC % is 11.81% (calculated using TTM income statement data).
Chengdu Zhimingda Electronics Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Chengdu Zhimingda Electronics Co (SHSE:688636) 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, Chengdu Zhimingda Electronics Co's WACC % is 16.65%. Chengdu Zhimingda Electronics Co's ROIC % is 11.81% (calculated using TTM income statement data).
Chengdu Zhimingda Electronics 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.
Chengdu Zhimingda Electronics Co ROIC % Related Terms
Chengdu Zhimingda Electronics 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.
SHSE:688636 vs DELL, ANET, SNDK: ROIC % Comparison
For the Computer Hardware subindustry, Chengdu Zhimingda Electronics 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.
Chengdu Zhimingda Electronics Co ROIC % vs Hardware Industry
For the Hardware industry and Technology sector, Chengdu Zhimingda Electronics Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Chengdu Zhimingda Electronics Co's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Jun. 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.
Chengdu Zhimingda Electronics Co (SHSE:688636) has a ROIC % of 12.18% as of Jun. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Chengdu Zhimingda Electronics Co and its competitors.
Is Chengdu Zhimingda Electronics Co's ROIC % too high?
Chengdu Zhimingda Electronics Co's current ROIC % is 12.18%. The Hardware industry median ROIC % is 4.38. Chengdu Zhimingda Electronics Co's value of 12.18% is 178.4% above this industry median. Overall, Chengdu Zhimingda Electronics Co has a GF Score™ of 78/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Chengdu Zhimingda Electronics Co's ROIC % compare to DELL and ANET?
Chengdu Zhimingda Electronics Co's ROIC % of 12.18% can be compared against companies in the Hardware industry. The industry median ROIC % is 4.38. Chengdu Zhimingda Electronics Co's value of 12.18% is 178.4% 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 Hardware company?
The median ROIC % among Hardware companies is 4.38, based on 2,436 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. Chengdu Zhimingda Electronics Co's current ROIC % of 12.18% is 178.4% 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 Chengdu Zhimingda Electronics Co and its competitors. For the Hardware industry, the median ROIC % is 4.38 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Chengdu Zhimingda Electronics Co's current ROIC % is 12.18%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Chengdu Zhimingda Electronics Co stock overvalued right now?
Based on GuruFocus' analysis, Chengdu Zhimingda Electronics Co (SHSE:688636) is currently considered Significantly Undervalued. The stock's GF Value™ is ¥37.40, compared to a current price of ¥20.54 — trading 45.1% below its estimated fair value. The current ROIC % is 12.18% and 178.4% above the Hardware industry median of 4.38. Chengdu Zhimingda Electronics Co's overall GF Score™ is 78/100 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 Chengdu Zhimingda Electronics Co (SHSE:688636), the current ROIC % is 12.18% as of Jun. 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 Chengdu Zhimingda Electronics Co (SHSE:688636) Overvalued in 2026?
Based on GuruFocus' analysis, Chengdu Zhimingda Electronics Co stock appears to be undervalued.
The current stock price of ¥20.54 is trading 45.1% below its estimated GF Value™ of ¥37.40.
GuruFocus considers Chengdu Zhimingda Electronics Co to be Significantly Undervalued.
Key valuation signals for SHSE:688636:
ROIC %: 12.18%
GF Value™: ¥37.40 vs. price of ¥20.54 (45.1% below fair value)
Industry Position: 178.4% above the Hardware median
No single metric tells the full story. See the SHSE:688636 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Chengdu Zhimingda Electronics Co Ltd provides customized embedded computer modules and solutions. The company focuses on the development of embedded computers, power supplies and related system equipment, and provides customized solutions, products and services based on customer needs.
78GF Score
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