SAMWHA CAPACITORLTD's (KRX:001820) Returns On Capital Not Reflecting Well On The Business

What are the early trends we should look for to identify a stock that could multiply in value over the long term? 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. In light of that, when we looked at SAMWHA CAPACITORLTD (KRX:001820) and its ROCE trend, we weren't exactly thrilled.

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What Is Return On Capital Employed (ROCE)?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for SAMWHA CAPACITORLTD, this is the formula:

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

0.04 = ₩11b ÷ (₩333b - ₩52b) (Based on the trailing twelve months to September 2025).

Therefore, SAMWHA CAPACITORLTD has an ROCE of 4.0%. Ultimately, that's a low return and it under-performs the Electronic industry average of 6.5%.

View our latest analysis for SAMWHA CAPACITORLTD

Above you can see how the current ROCE for SAMWHA CAPACITORLTD compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for SAMWHA CAPACITORLTD .

What Does the ROCE Trend For SAMWHA CAPACITORLTD Tell Us?

When we looked at the ROCE trend at SAMWHA CAPACITORLTD, we didn't gain much confidence. Over the last five years, returns on capital have decreased to 4.0% from 13% five years ago. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It may take some time before the company starts to see any change in earnings from these investments.

The Bottom Line On SAMWHA CAPACITORLTD's ROCE

To conclude, we've found that SAMWHA CAPACITORLTD is reinvesting in the business, but returns have been falling. And investors appear hesitant that the trends will pick up because the stock has fallen 42% in the last five years. 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.

Like most companies, SAMWHA CAPACITORLTD does come with some risks, and we've found 2 warning signs that you should be aware of.

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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.