Shanghai Jinjiang Shipping (Group) Co (SHSE:601083) ROIC % : 17.42% (As of Mar. 2024)

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What is Shanghai Jinjiang Shipping (Group) 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 %. Shanghai Jinjiang Shipping (Group) Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 17.42%.

As of today (2024-05-13), Shanghai Jinjiang Shipping (Group) Co's WACC % is 10.12%. Shanghai Jinjiang Shipping (Group) Co's ROIC % is 12.94% (calculated using TTM income statement data). Shanghai Jinjiang Shipping (Group) Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Shanghai Jinjiang Shipping (Group) Co ROIC % Historical Data

The historical data trend for Shanghai Jinjiang Shipping (Group) 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.

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Shanghai Jinjiang Shipping (Group) Co ROIC % Chart

Shanghai Jinjiang Shipping (Group) Co Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

13.00

20.70

47.65

48.83

17.69

Shanghai Jinjiang Shipping (Group) Co Quarterly Data
	Dec19	Dec20	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROIC %	Get a 7-Day Free Trial							19.62	18.59	16.67	-1.22	17.42

Competitive Comparison of Shanghai Jinjiang Shipping (Group) Co's ROIC %

For the Marine Shipping subindustry, Shanghai Jinjiang Shipping (Group) 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.

Shanghai Jinjiang Shipping (Group) Co's ROIC % Distribution in the Transportation Industry

For the Transportation industry and Industrials sector, Shanghai Jinjiang Shipping (Group) Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Shanghai Jinjiang Shipping (Group) Co's ROIC % falls into.

Shanghai Jinjiang Shipping (Group) Co ROIC % Calculation

Shanghai Jinjiang Shipping (Group) 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 )
=	899.881 * ( 1 - 18.9% )	/	( (4335.774	+	3915.506)	/ 2 )
=	729.803491	/	4125.64
=	17.69 %

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	))
=	8627.606	-	1180.937	-	( 3930.884	-	max(0, 1811.276	-	4922.171	+	3930.884	))
=	4335.774

	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	))
=	9907.791	-	920.729	-	( 5778.753	-	max(0, 1327.193	-	6398.749	+	5778.753	))
=	3915.506

Shanghai Jinjiang Shipping (Group) Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROIC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	808.008 * ( 1 - 18.05% )	/	( (3915.506	+	3687.277)	/ 2 )
=	662.162556	/	3801.3915
=	17.42 %

where

	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	))
=	9907.791	-	920.729	-	( 5778.753	-	max(0, 1327.193	-	6398.749	+	5778.753	))
=	3915.506

	Invested Capital		(Q: Mar. 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	))
=	9911.65	-	937.287	-	( 5763.702	-	max(0, 1260.026	-	6547.112	+	5763.702	))
=	3687.277

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

Shanghai Jinjiang Shipping (Group) Co (SHSE:601083) 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, Shanghai Jinjiang Shipping (Group) Co's WACC % is 10.12%. Shanghai Jinjiang Shipping (Group) Co's ROIC % is 12.94% (calculated using TTM income statement data). Shanghai Jinjiang Shipping (Group) Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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. Shanghai Jinjiang Shipping (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 %, 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.

Shanghai Jinjiang Shipping (Group) Co ROIC % Related Terms

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Shanghai Jinjiang Shipping (Group) Co (SHSE:601083) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » Shanghai Jinjiang Shipping (Group) Co Ltd (SHSE:601083) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 98 Huaihai Middle Road, 15th Floor, Admiralty Plaza, Shanghai, CHN, 200021

Website

https://www.jjshipping.cn

Shanghai Jinjiang Shipping (Group) Co Ltd is engaged in International and domestic maritime container transportation business.

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