A Look Into Wus Printed Circuit (Kunshan)'s (SZSE:002463) Impressive Returns On Capital

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. With that in mind, the ROCE of Wus Printed Circuit (Kunshan) (SZSE:002463) looks attractive right now, so lets see what the trend of returns can tell us.

Return On Capital Employed (ROCE): What Is It?

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Wus Printed Circuit (Kunshan):

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.25 = CN¥3.0b ÷ (CN¥19b - CN¥7.2b) (Based on the trailing twelve months to December 2024).

So, Wus Printed Circuit (Kunshan) has an ROCE of 25%. In absolute terms that's a great return and it's even better than the Electronic industry average of 5.5%.

Check out our latest analysis for Wus Printed Circuit (Kunshan)

Above you can see how the current ROCE for Wus Printed Circuit (Kunshan) compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Wus Printed Circuit (Kunshan) .

So How Is Wus Printed Circuit (Kunshan)'s ROCE Trending?

We'd be pretty happy with returns on capital like Wus Printed Circuit (Kunshan). The company has consistently earned 25% for the last five years, and the capital employed within the business has risen 128% in that time. Returns like this are the envy of most businesses and given it has repeatedly reinvested at these rates, that's even better. You'll see this when looking at well operated businesses or favorable business models.

In Conclusion...

Wus Printed Circuit (Kunshan) has demonstrated its proficiency by generating high returns on increasing amounts of capital employed, which we're thrilled about. Therefore it's no surprise that shareholders have earned a respectable 95% return if they held over the last five years. So even though the stock might be more "expensive" than it was before, we think the strong fundamentals warrant this stock for further research.

On a separate note, we've found 1 warning sign for Wus Printed Circuit (Kunshan) you'll probably want to know about.

If you want to search for more stocks that have been earning high returns, check out this free list of stocks with solid balance sheets that are also earning high returns on equity.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.