China Dongxiang (Group) Co (HKSE:03818) ROC % : 0.85% (As of Sep. 2023)

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What is China Dongxiang (Group) Co ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. China Dongxiang (Group) Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was 0.85%.

As of today (2024-06-08), China Dongxiang (Group) Co's WACC % is 12.67%. China Dongxiang (Group) Co's ROC % is 0.23% (calculated using TTM income statement data). China Dongxiang (Group) Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China Dongxiang (Group) Co ROC % Historical Data

The historical data trend for China Dongxiang (Group) Co's ROC % 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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China Dongxiang (Group) Co ROC % Chart

China Dongxiang (Group) Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

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-0.22

0.15

-3.72

-0.64

China Dongxiang (Group) Co Semi-Annual Data
	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
ROC %	Get a 7-Day Free Trial															-2.53	-5.04	-1.68	-0.30	0.85

China Dongxiang (Group) Co ROC % Calculation

China Dongxiang (Group) Co's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	-71.45 * ( 1 - 33.91% )	/	( (7702.177	+	7080.862)	/ 2 )
=	-47.221305	/	7391.5195
=	-0.64 %

where

	Invested Capital		(A: Mar. 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	))
=	12928.102	-	461.625	-	( 4764.3	-	max(0, 973.859	-	6502.285	+	4764.3	))
=	7702.177

	Invested Capital		(A: Mar. 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	))
=	12046.95	-	439.797	-	( 4526.291	-	max(0, 646.759	-	5432.305	+	4526.291	))
=	7080.862

China Dongxiang (Group) Co's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	61.17 * ( 1 - 7.19% )	/	( (7080.862	+	6295.281)	/ 2 )
=	56.771877	/	6688.0715
=	0.85 %

where

	Invested Capital		(Q: Mar. 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	))
=	12046.95	-	439.797	-	( 4526.291	-	max(0, 646.759	-	5432.305	+	4526.291	))
=	7080.862

	Invested Capital		(Q: Sep. 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	))
=	10989.92	-	397.048	-	( 4297.591	-	max(0, 603.808	-	5166.292	+	4297.591	))
=	6295.281

Note: The Operating Income data used here is two times the semi-annual (Sep. 2023) data.

China Dongxiang (Group) Co (HKSE:03818) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, China Dongxiang (Group) Co's WACC % is 12.67%. China Dongxiang (Group) Co's ROC % is 0.23% (calculated using TTM income statement data). China Dongxiang (Group) 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 %, ROC % 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.

China Dongxiang (Group) Co ROC % Related Terms

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China Dongxiang (Group) Co (HKSE:03818) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » China Dongxiang (Group) Co Ltd (HKSE:03818) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

CDGXY:USA CDGXF:USA 4C1:Germany

Address

Building 21, No. 2 Jingyuanbei Street, Beijing Economic-Technological Development Area, Beijing, CHN, 100176

Website

http://www.dxsport.com

China Dongxiang (Group) Co Ltd manufactures sports apparel and footwear. Its main brand is Kappa, which it sells in China. The company's primary sales channel is wholesale to distributors. The company also sells directly to consumers through more than 1,000 company-operated retail stores and outlets in China and through its e-commerce channel. It has two segments China Apparel and Investment. Sales in China account for most of the total company's revenue.

Executives

Harvest Luck Development Limited	2201 Interest of corporation controlled by you
Poseidon Sports Limited	2201 Interest of corporation controlled by you
Chen Yihong	2201 Interest of corporation controlled by you
China Dongxiang (group) Co. Ltd.	2201 Interest of corporation controlled by you
Gaea Sports Limited	2106 Person having a security interest in shares
Billion Giant Development Limited	2201 Interest of corporation controlled by you

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