Haitai Confectionery&Foodsltd (KRX:101530) Has More To Do To Multiply In Value Going Forward

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding 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. Although, when we looked at Haitai Confectionery&Foodsltd (KRX:101530), it didn't seem to tick all of these boxes.

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What Is 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. Analysts use this formula to calculate it for Haitai Confectionery&Foodsltd:

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

0.092 = ₩43b ÷ (₩720b - ₩252b) (Based on the trailing twelve months to September 2025).

Thus, Haitai Confectionery&Foodsltd has an ROCE of 9.2%. On its own that's a low return, but compared to the average of 6.7% generated by the Food industry, it's much better.

Check out our latest analysis for Haitai Confectionery&Foodsltd

Historical performance is a great place to start when researching a stock so above you can see the gauge for Haitai Confectionery&Foodsltd's ROCE against it's prior returns. If you're interested in investigating Haitai Confectionery&Foodsltd's past further, check out this free graph covering Haitai Confectionery&Foodsltd's past earnings, revenue and cash flow.

What The Trend Of ROCE Can Tell Us

Things have been pretty stable at Haitai Confectionery&Foodsltd, with its capital employed and returns on that capital staying somewhat the same for the last five years. This tells us the company isn't reinvesting in itself, so it's plausible that it's past the growth phase. So unless we see a substantial change at Haitai Confectionery&Foodsltd in terms of ROCE and additional investments being made, we wouldn't hold our breath on it being a multi-bagger.

On a side note, Haitai Confectionery&Foodsltd has done well to reduce current liabilities to 35% of total assets over the last five years. Effectively suppliers now fund less of the business, which can lower some elements of risk.

What We Can Learn From Haitai Confectionery&Foodsltd's ROCE

In a nutshell, Haitai Confectionery&Foodsltd has been trudging along with the same returns from the same amount of capital over the last five years. Unsurprisingly then, the total return to shareholders over the last five years has been flat. In any case, the stock doesn't have these traits of a multi-bagger discussed above, so if that's what you're looking for, we think you'd have more luck elsewhere.

On a final note, we've found 1 warning sign for Haitai Confectionery&Foodsltd that we think you should be aware of.

While Haitai Confectionery&Foodsltd isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

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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.