Returns Are Gaining Momentum At Hansol Inticube (KOSDAQ:070590)

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So on that note, Hansol Inticube (KOSDAQ:070590) looks quite promising in regards to its trends of return on capital.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Return On Capital Employed (ROCE): What Is It?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Hansol Inticube, this is the formula:

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

0.043 = ₩759m ÷ (₩33b - ₩15b) (Based on the trailing twelve months to June 2025).

So, Hansol Inticube has an ROCE of 4.3%. Ultimately, that's a low return and it under-performs the IT industry average of 9.0%.

View our latest analysis for Hansol Inticube

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

What Can We Tell From Hansol Inticube's ROCE Trend?

We're delighted to see that Hansol Inticube is reaping rewards from its investments and has now broken into profitability. The company was generating losses four years ago, but now it's turned around, earning 4.3% which is no doubt a relief for some early shareholders. Additionally, the business is utilizing 39% less capital than it was four years ago, and taken at face value, that can mean the company needs less funds at work to get a return. The reduction could indicate that the company is selling some assets, and considering returns are up, they appear to be selling the right ones.

On a side note, we noticed that the improvement in ROCE appears to be partly fueled by an increase in current liabilities. Effectively this means that suppliers or short-term creditors are now funding 46% of the business, which is more than it was four years ago. And with current liabilities at those levels, that's pretty high.

In Conclusion...

In a nutshell, we're pleased to see that Hansol Inticube has been able to generate higher returns from less capital. Given the stock has declined 13% in the last five years, this could be a good investment if the valuation and other metrics are also appealing. So researching this company further and determining whether or not these trends will continue seems justified.

If you'd like to know about the risks facing Hansol Inticube, we've discovered 2 warning signs that you should be aware of.

For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity.

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.