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Lianhe Chemical Technology Co (SZSE:002250) ROIC % : 0.64% (As of Sep. 2024)


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What is Lianhe Chemical Technology Co 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 %. Lianhe Chemical Technology Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 0.64%.

As of today (2024-12-13), Lianhe Chemical Technology Co's WACC % is 6.45%. Lianhe Chemical Technology Co's ROIC % is 1.27% (calculated using TTM income statement data). Lianhe Chemical Technology Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Lianhe Chemical Technology Co ROIC % Historical Data

The historical data trend for Lianhe Chemical Technology Co'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.

Lianhe Chemical Technology Co ROIC % Chart

Lianhe Chemical Technology Co Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 5.21 5.12 5.78 6.45 0.66

Lianhe Chemical Technology Co Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 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 -0.55 -3.49 2.27 1.19 0.64

Competitive Comparison of Lianhe Chemical Technology Co's ROIC %

For the Specialty Chemicals subindustry, Lianhe Chemical Technology 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.


Lianhe Chemical Technology Co's ROIC % Distribution in the Chemicals Industry

For the Chemicals industry and Basic Materials sector, Lianhe Chemical Technology Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Lianhe Chemical Technology Co's ROIC % falls into.



Lianhe Chemical Technology Co ROIC % Calculation

Lianhe Chemical Technology Co'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 )
=67.498 * ( 1 - -6.83% )/( (10954.929 + 11033.412)/ 2 )
=72.1081134/10994.1705
=0.66 %

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))
=15008.66 - 3470.575 - ( 583.156 - max(0, 5625.802 - 6388.619+583.156))
=10954.929

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))
=13907.014 - 2222.222 - ( 651.38 - max(0, 3658.553 - 5157.952+651.38))
=11033.412

Lianhe Chemical Technology Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2024 is calculated as:

ROIC % (Q: Sep. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2024 ) + Invested Capital (Q: Sep. 2024 ))/ count )
=90.62 * ( 1 - 27.19% )/( (10426.002 + 10256.236)/ 2 )
=65.980422/10341.119
=0.64 %

where

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))
=13603.046 - 2108.014 - ( 1069.03 - max(0, 3425.9 - 5229.674+1069.03))
=10426.002

Invested Capital(Q: Sep. 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))
=13649.072 - 2074.405 - ( 1318.431 - max(0, 3728.7 - 5223.372+1318.431))
=10256.236

Note: The Operating Income data used here is four times the quarterly (Sep. 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.


Lianhe Chemical Technology Co  (SZSE:002250) 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, Lianhe Chemical Technology Co's WACC % is 6.45%. Lianhe Chemical Technology Co's ROIC % is 1.27% (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.


Lianhe Chemical Technology Co ROIC % Related Terms

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Lianhe Chemical Technology Co Business Description

Traded in Other Exchanges
N/A
Address
No. 41 Wangxi Road, Huangyan District, Taizhou, Zhejiang, CHN, 318020
Lianhe Chemical Technology Co Ltd operates in chemical raw materials and chemical manufacturing industry. The company is engaged in providing chemical and technical solutions to areas of pesticides, pharmaceuticals, functional chemicals, and equipment and engineering.
Executives
Fan Xiao Bin Directors, executives
Chen Fei Biao Directors, executives
Feng Yu Hai Supervisors
Peng Yin Sheng Director
Ren An Li Securities Affairs Representative
Yu Zhen Ying Supervisors
Mou Jin Xiang Director
Zhou Wei Cheng Independent director
Zhang You Zhi Director
He Chun Executives
Zhang Xian Gui Executives
Ye Cai Qun Securities Affairs Representative
Ye Yuan Ming Executives
Bao Zhen Yong Directors, executives, securities affairs represen
Zheng Xian Ping Executives

Lianhe Chemical Technology Co Headlines

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