Feiyu Technology International (HKG:1022) Is Doing The Right Things To Multiply Its Share Price

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we've noticed some promising trends at Feiyu Technology International (HKG:1022) so let's look a bit deeper.

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Understanding Return On Capital Employed (ROCE)

For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Feiyu Technology International is:

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

0.024 = CN¥15m ÷ (CN¥718m - CN¥91m) (Based on the trailing twelve months to June 2025).

Therefore, Feiyu Technology International has an ROCE of 2.4%. In absolute terms, that's a low return and it also under-performs the Entertainment industry average of 8.7%.

Check out our latest analysis for Feiyu Technology International

Historical performance is a great place to start when researching a stock so above you can see the gauge for Feiyu Technology International's ROCE against it's prior returns. If you'd like to look at how Feiyu Technology International has performed in the past in other metrics, you can view this free graph of Feiyu Technology International's past earnings, revenue and cash flow.

What Can We Tell From Feiyu Technology International's ROCE Trend?

Feiyu Technology International has broken into the black (profitability) and we're sure it's a sight for sore eyes. While the business was unprofitable in the past, it's now turned things around and is earning 2.4% on its capital. On top of that, what's interesting is that the amount of capital being employed has remained steady, so the business hasn't needed to put any additional money to work to generate these higher returns. With no noticeable increase in capital employed, it's worth knowing what the company plans on doing going forward in regards to reinvesting and growing the business. So if you're looking for high growth, you'll want to see a business's capital employed also increasing.

What We Can Learn From Feiyu Technology International's ROCE

As discussed above, Feiyu Technology International appears to be getting more proficient at generating returns since capital employed has remained flat but earnings (before interest and tax) are up. And a remarkable 293% 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.

Feiyu Technology International does have some risks, we noticed 2 warning signs (and 1 which is potentially serious) we think you should know about.

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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.