Samwha ElectricLtd's (KRX:009470) Returns On Capital Are Heading Higher

If you're looking for a multi-bagger, there's a few things to keep an eye out for. In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Speaking of which, we noticed some great changes in Samwha ElectricLtd's (KRX:009470) returns on capital, so let's have a look.

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

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. Analysts use this formula to calculate it for Samwha ElectricLtd:

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

0.11 = ₩15b ÷ (₩179b - ₩48b) (Based on the trailing twelve months to June 2025).

Thus, Samwha ElectricLtd has an ROCE of 11%. On its own, that's a standard return, however it's much better than the 6.4% generated by the Electronic industry.

Check out our latest analysis for Samwha ElectricLtd

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

So How Is Samwha ElectricLtd's ROCE Trending?

The trends we've noticed at Samwha ElectricLtd are quite reassuring. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 11%. The amount of capital employed has increased too, by 63%. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

The Bottom Line On Samwha ElectricLtd's ROCE

All in all, it's terrific to see that Samwha ElectricLtd is reaping the rewards from prior investments and is growing its capital base. And investors seem to expect more of this going forward, since the stock has rewarded shareholders with a 56% return over the last five years. In light of that, we think it's worth looking further into this stock because if Samwha ElectricLtd can keep these trends up, it could have a bright future ahead.

On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for A009470 on our platform that is definitely worth checking out.

While Samwha ElectricLtd 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.