Star Plus Legend Holdings (HKSE:06683) ROC % : 9.00% (As of Dec. 2023)

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What is Star Plus Legend Holdings 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 %. Star Plus Legend Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 9.00%.

As of today (2024-06-09), Star Plus Legend Holdings's WACC % is 10.42%. Star Plus Legend Holdings's ROC % is 8.98% (calculated using TTM income statement data). Star Plus Legend Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Star Plus Legend Holdings ROC % Historical Data

The historical data trend for Star Plus Legend Holdings'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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Star Plus Legend Holdings ROC % Chart

Star Plus Legend Holdings Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

38.35

71.50

18.45

18.87

8.56

Star Plus Legend Holdings Semi-Annual Data
	Dec19	Dec20	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial			-	10.57	28.37	9.80	9.00

Star Plus Legend Holdings ROC % Calculation

Star Plus Legend Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	71.733 * ( 1 - 38.06% )	/	( (407.248	+	630.854)	/ 2 )
=	44.4314202	/	519.051
=	8.56 %

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	))
=	619.626	-	94.337	-	( 203.949	-	max(0, 346.735	-	464.776	+	203.949	))
=	407.248

	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	))
=	987.216	-	168.521	-	( 187.841	-	max(0, 222.925	-	790.476	+	187.841	))
=	630.854

Star Plus Legend Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	85.352 * ( 1 - 43.25% )	/	( (445.783	+	630.854)	/ 2 )
=	48.43726	/	538.3185
=	9.00 %

where

	Invested Capital		(Q: Jun. 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	))
=	603.897	-	86.671	-	( 109.841	-	max(0, 376.332	-	447.775	+	109.841	))
=	445.783

	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	))
=	987.216	-	168.521	-	( 187.841	-	max(0, 222.925	-	790.476	+	187.841	))
=	630.854

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

Star Plus Legend Holdings (HKSE:06683) 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, Star Plus Legend Holdings's WACC % is 10.42%. Star Plus Legend Holdings's ROC % is 8.98% (calculated using TTM income statement data). Star Plus Legend Holdings 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.

Star Plus Legend Holdings ROC % Related Terms

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Star Plus Legend Holdings (HKSE:06683) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Star Plus Legend Holdings Ltd (HKSE:06683) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

68 Jinjie Road, 2/F, Block 1, Dream Star Garden, Huaqiao Town, Kunshan, CHN

Website

https://www.splegend.com

Star Plus Legend Holdings Ltd is an investment holding company. The company and its subsidiaries are principally engaged in new retail business and IP creation and operation business in the People's Republic of China. In the new retail business, the company primarily develops and sells health management products and skincare products. In the IP creation and operation business, the company creates unique celebrity IPs by providing planning and other project management services to media content, acting as an event planning service provider and investor in large-scale concerts featuring celebrities and other events, together with designing and licensing proprietary celebrity IPs. The majority of revenue is derived from the new retail business.

Executives

Zhang Yuan	2201 Interest of corporation controlled by you
Lai Kwok Fai Franki	2101 Beneficial owner
Chen Chung	2501 Other
Ma Hsin-ting	2501 Other
Yang Chun-jung	2501 Other
Yeh Hui-mei	2501 Other
Harmony Culture Investment Limited	2101 Beneficial owner
Legend Key International Limited	2101 Beneficial owner
Max One Ltd.	2101 Beneficial owner
Loo See Yuen	2201 Interest of corporation controlled by you
Ho Chi Sing	2201 Interest of corporation controlled by you

Star Plus Legend Holdings (HKSE:06683) Headlines

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