Shareholders Would Enjoy A Repeat Of Beng Kuang Marine's (SGX:BEZ) Recent Growth In Returns

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. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. And in light of that, the trends we're seeing at Beng Kuang Marine's (SGX:BEZ) look very promising so lets take a look.

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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. The formula for this calculation on Beng Kuang Marine is:

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

0.43 = S$17m ÷ (S$78m - S$39m) (Based on the trailing twelve months to June 2025).

Thus, Beng Kuang Marine has an ROCE of 43%. In absolute terms that's a great return and it's even better than the Commercial Services industry average of 5.7%.

See our latest analysis for Beng Kuang Marine

In the above chart we have measured Beng Kuang Marine's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free analyst report for Beng Kuang Marine .

The Trend Of ROCE

Like most people, we're pleased that Beng Kuang Marine is now generating some pretax earnings. The company was generating losses five years ago, but now it's turned around, earning 43% which is no doubt a relief for some early shareholders. In regards to capital employed, Beng Kuang Marine is using 38% less capital than it was five years ago, which on the surface, can indicate that the business has become more efficient at generating these returns. Beng Kuang Marine could be selling under-performing assets since the ROCE is improving.

On a side note, Beng Kuang Marine's current liabilities are still rather high at 49% of total assets. This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.

The Bottom Line

In a nutshell, we're pleased to see that Beng Kuang Marine has been able to generate higher returns from less capital. And a remarkable 329% total return over the last five years tells us that investors are expecting more good things to come in the future. In light of that, we think it's worth looking further into this stock because if Beng Kuang Marine can keep these trends up, it could have a bright future ahead.

One more thing, we've spotted 2 warning signs facing Beng Kuang Marine that you might find interesting.

Beng Kuang Marine is not the only stock earning high returns. If you'd like to see more, check out our free list of companies earning high returns on equity with solid fundamentals.

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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.