Yantai North Andre JuiceLtd (HKG:2218) Might Have The Makings Of A Multi-Bagger

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, Yantai North Andre JuiceLtd (HKG:2218) looks quite promising in regards to its trends of return on capital.

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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. To calculate this metric for Yantai North Andre JuiceLtd, this is the formula:

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

0.10 = CN¥273m ÷ (CN¥2.8b - CN¥110m) (Based on the trailing twelve months to March 2025).

Therefore, Yantai North Andre JuiceLtd has an ROCE of 10.0%. On its own, that's a low figure but it's around the 9.1% average generated by the Food industry.

See our latest analysis for Yantai North Andre JuiceLtd

In the above chart we have measured Yantai North Andre JuiceLtd's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Yantai North Andre JuiceLtd .

So How Is Yantai North Andre JuiceLtd's ROCE Trending?

Even though ROCE is still low in absolute terms, it's good to see it's heading in the right direction. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 10.0%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 37%. So we're very much inspired by what we're seeing at Yantai North Andre JuiceLtd thanks to its ability to profitably reinvest capital.

Our Take On Yantai North Andre JuiceLtd's ROCE

To sum it up, Yantai North Andre JuiceLtd has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. And a remarkable 273% total return over the last five years tells us that investors are expecting more good things to come in the future. Therefore, we think it would be worth your time to check if these trends are going to continue.

If you'd like to know more about Yantai North Andre JuiceLtd, we've spotted 3 warning signs, and 2 of them are a bit concerning.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive 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.