UP Fintech’s 2.83% ROIC Trails 8.80% WACC; Qifu Tech Reaches 9.81%
UP Fintech Holding Ltd. generated a 2.83% ROIC against an 8.80% WACC for a ROIC/WACC ratio of 0.32, signaling returns below its capital cost. Qifu Technology outperformed with a 9.81% ROIC and 1.75 ratio, while Tencent Music achieved a 12.75% ROIC with a 1.89 ROIC/WACC ratio.
1. UP Fintech’s Capital Efficiency
UP Fintech Holding Ltd. posted a ROIC of 2.83% versus a WACC of 8.80%, resulting in a ROIC/WACC ratio of 0.32. This gap indicates the company is not generating sufficient returns to cover its cost of capital, raising questions about operational efficiency.
2. Performance of Key Peers
Futu Holdings reported a 5.10% ROIC against a 5.54% WACC for a ratio of 0.92, nearing breakeven on capital cost. Qifu Technology outpaced all with a 9.81% ROIC and 5.62% WACC, yielding a 1.75 ratio that highlights superior capital utilization.
3. Sector Benchmark: Tencent Music
Tencent Music leads the industry with a 12.75% ROIC and a 6.77% WACC, translating to a 1.89 ROIC/WACC ratio. This performance sets a high standard for capital efficiency and underscores the disparity between top performers and lower-return firms like UP Fintech.