99 Speed Mart Retail Holdings Berhad (KLSE:99SMART) Is Reinvesting To Multiply In Value

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount 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. With that in mind, the ROCE of 99 Speed Mart Retail Holdings Berhad (KLSE:99SMART) looks attractive right now, so lets see what the trend of returns can tell us.

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What Is Return On Capital Employed (ROCE)?

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for 99 Speed Mart Retail Holdings Berhad:

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

0.29 = RM734m ÷ (RM3.9b - RM1.4b) (Based on the trailing twelve months to June 2025).

So, 99 Speed Mart Retail Holdings Berhad has an ROCE of 29%. That's a fantastic return and not only that, it outpaces the average of 11% earned by companies in a similar industry.

View our latest analysis for 99 Speed Mart Retail Holdings Berhad

Above you can see how the current ROCE for 99 Speed Mart Retail Holdings Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for 99 Speed Mart Retail Holdings Berhad .

The Trend Of ROCE

It's hard not to be impressed by 99 Speed Mart Retail Holdings Berhad's returns on capital. The company has consistently earned 29% for the last four years, and the capital employed within the business has risen 79% in that time. Now considering ROCE is an attractive 29%, this combination is actually pretty appealing because it means the business can consistently put money to work and generate these high returns. If 99 Speed Mart Retail Holdings Berhad can keep this up, we'd be very optimistic about its future.

What We Can Learn From 99 Speed Mart Retail Holdings Berhad's ROCE

In the end, the company has proven it can reinvest it's capital at high rates of returns, which you'll remember is a trait of a multi-bagger. And the stock has followed suit returning a meaningful 26% to shareholders over the last year. So even though the stock might be more "expensive" than it was before, we think the strong fundamentals warrant this stock for further research.

99 Speed Mart Retail Holdings Berhad does have some risks though, and we've spotted 1 warning sign for 99 Speed Mart Retail Holdings Berhad that you might be interested in.

High returns are a key ingredient to strong performance, so check out our free list ofstocks 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.