Champion Real Estate Investment Trust (HKSE:02778) ROIC % : 1.49% (As of Dec. 2023)

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What is Champion Real Estate Investment Trust 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 %. Champion Real Estate Investment Trust's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 1.49%.

As of today (2024-05-27), Champion Real Estate Investment Trust's WACC % is 4.91%. Champion Real Estate Investment Trust's ROIC % is 1.30% (calculated using TTM income statement data). Champion Real Estate Investment Trust earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Champion Real Estate Investment Trust ROIC % Historical Data

The historical data trend for Champion Real Estate Investment Trust'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.

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Champion Real Estate Investment Trust ROIC % Chart

Champion Real Estate Investment Trust Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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5.15

2.69

3.76

3.56

1.32

Champion Real Estate Investment Trust Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROIC %	Get a 7-Day Free Trial															1.70	0.78	2.71	0.97	1.49

Competitive Comparison of Champion Real Estate Investment Trust's ROIC %

For the REIT - Retail subindustry, Champion Real Estate Investment Trust'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.

Champion Real Estate Investment Trust's ROIC % Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Champion Real Estate Investment Trust's ROIC % distribution charts can be found below:

* The bar in red indicates where Champion Real Estate Investment Trust's ROIC % falls into.

Champion Real Estate Investment Trust ROIC % Calculation

Champion Real Estate Investment Trust'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 )
=	1687.861 * ( 1 - 46.07% )	/	( (68557.38	+	69043.136)	/ 2 )
=	910.2634373	/	68800.258
=	1.32 %

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	))
=	65228.879	-	2015.527	-	( 734.931	-	max(0, 6414.541	-	1070.513	+	734.931	))
=	68557.38

	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	))
=	64466.154	-	1955.212	-	( 980.582	-	max(0, 7813.406	-	1281.212	+	980.582	))
=	69043.136

Champion Real Estate Investment Trust's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	1650.738 * ( 1 - 35.98% )	/	( (72393.247	+	69043.136)	/ 2 )
=	1056.8024676	/	70718.1915
=	1.49 %

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	))
=	64815.25	-	2007.521	-	( 893.61	-	max(0, 10884.708	-	1299.19	+	893.61	))
=	72393.247

	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	))
=	64466.154	-	1955.212	-	( 980.582	-	max(0, 7813.406	-	1281.212	+	980.582	))
=	69043.136

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

Champion Real Estate Investment Trust (HKSE:02778) 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, Champion Real Estate Investment Trust's WACC % is 4.91%. Champion Real Estate Investment Trust's ROIC % is 1.30% (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.

Champion Real Estate Investment Trust ROIC % Related Terms

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Champion Real Estate Investment Trust (HKSE:02778) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Champion Real Estate Investment Trust (HKSE:02778) » Definitions » ROIC %

Comparable Companies

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CMPNF:USA

Address

Great Eagle Centre, 23 Harbour Road, Suite 3008, 30th Floor, Wanchai, Hong Kong, HKG

Website

https://www.championreit.com

Champion Real Estate Investment Trust, or Champion REIT, owns and invests in income-producing office and retail properties, with a focus on Grade A commercial properties in prime locations. In Hong Kong, the trust holds two assets in Three Garden Road in the central business district and the retail and office components of Langham Place in Mong Kok. Great Eagle Holdings listed Champion REIT with a 91.5% stake in Three Garden Road in 2006 and injected the Langham Place office and retail portions into the trust in 2008. The trust acquired the remaining stake in Three Garden Road and unified ownership of the property in 2013. Great Eagle Holdings retains a 68.3% stake in Champion REIT. In 2021, the trust entered into a joint venture to acquire a 27% stake in 66 Shoe Lane in London.

Executives

Great Eagle Holdings Limited	2201 Interest of corporation controlled by you
Lo Ka Shui	2201 Interest of corporation controlled by you
Eagle Asset Management (cp) Limited	2101 Beneficial owner
Hsbc International Trustee Limited	2301 Trustee

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