Shareholders Would Enjoy A Repeat Of Dekon Food and Agriculture Group's (HKG:2419) Recent Growth In Returns

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. With that in mind, the ROCE of Dekon Food and Agriculture Group (HKG:2419) looks great, so lets see what the trend can tell us.

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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. The formula for this calculation on Dekon Food and Agriculture Group is:

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

0.29 = CN¥4.3b ÷ (CN¥24b - CN¥8.9b) (Based on the trailing twelve months to June 2025).

So, Dekon Food and Agriculture Group has an ROCE of 29%. In absolute terms that's a great return and it's even better than the Food industry average of 11%.

Check out our latest analysis for Dekon Food and Agriculture Group

In the above chart we have measured Dekon Food and Agriculture Group's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free analyst report for Dekon Food and Agriculture Group .

So How Is Dekon Food and Agriculture Group's ROCE Trending?

Dekon Food and Agriculture Group is displaying some positive trends. The numbers show that in the last four years, the returns generated on capital employed have grown considerably to 29%. The amount of capital employed has increased too, by 50%. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

What We Can Learn From Dekon Food and Agriculture Group's ROCE

In summary, it's great to see that Dekon Food and Agriculture Group can compound returns by consistently reinvesting capital at increasing rates of return, because these are some of the key ingredients of those highly sought after multi-baggers. And with a respectable 63% awarded to those who held the stock over the last year, you could argue that these developments are starting to get the attention they deserve. In light of that, we think it's worth looking further into this stock because if Dekon Food and Agriculture Group can keep these trends up, it could have a bright future ahead.

On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for 2419 on our platform that is definitely worth checking out.

Dekon Food and Agriculture Group is not the only stock earning high returns. If you'd like to see more, check out our free list of companies earning high returns on equity with solid fundamentals.

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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.