Here's What To Make Of Sukgyung AT's (KOSDAQ:357550) Decelerating Rates Of Return

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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. That's why when we briefly looked at Sukgyung AT's (KOSDAQ:357550) ROCE trend, we were pretty happy with what we saw.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

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. The formula for this calculation on Sukgyung AT is:

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

0.10 = ₩5.1b ÷ (₩52b - ₩2.1b) (Based on the trailing twelve months to June 2025).

Thus, Sukgyung AT has an ROCE of 10%. On its own, that's a standard return, however it's much better than the 7.0% generated by the Chemicals industry.

Check out our latest analysis for Sukgyung AT

Historical performance is a great place to start when researching a stock so above you can see the gauge for Sukgyung AT's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Sukgyung AT.

What Does the ROCE Trend For Sukgyung AT Tell Us?

While the returns on capital are good, they haven't moved much. Over the past five years, ROCE has remained relatively flat at around 10% and the business has deployed 297% more capital into its operations. 10% is a pretty standard return, and it provides some comfort knowing that Sukgyung AT has consistently earned this amount. Stable returns in this ballpark can be unexciting, but if they can be maintained over the long run, they often provide nice rewards to shareholders.

On a side note, Sukgyung AT has done well to reduce current liabilities to 4.0% of total assets over the last five years. This can eliminate some of the risks inherent in the operations because the business has less outstanding obligations to their suppliers and or short-term creditors than they did previously.

The Bottom Line On Sukgyung AT's ROCE

The main thing to remember is that Sukgyung AT has proven its ability to continually reinvest at respectable rates of return. And long term investors would be thrilled with the 102% return they've received over the last three 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.

Like most companies, Sukgyung AT does come with some risks, and we've found 1 warning sign that you should be aware of.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.