Returns At Kein Hing International Berhad (KLSE:KEINHIN) Are On The Way Up

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, 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. So when we looked at Kein Hing International Berhad (KLSE:KEINHIN) and its trend of ROCE, we really liked what we saw.

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

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 Kein Hing International Berhad:

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

0.11 = RM23m ÷ (RM293m - RM74m) (Based on the trailing twelve months to July 2025).

Therefore, Kein Hing International Berhad has an ROCE of 11%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Machinery industry average of 9.0%.

See our latest analysis for Kein Hing International Berhad

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

What Does the ROCE Trend For Kein Hing International Berhad Tell Us?

We like the trends that we're seeing from Kein Hing International Berhad. The data shows that returns on capital have increased substantially over the last five years to 11%. The amount of capital employed has increased too, by 42%. So we're very much inspired by what we're seeing at Kein Hing International Berhad thanks to its ability to profitably reinvest capital.

In Conclusion...

A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Kein Hing International Berhad has. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.

On a final note, we've found 2 warning signs for Kein Hing International Berhad that we think 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.