If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Having said that, from a first glance at Wuxi Taclink Optoelectronics Technology (SHSE:688205) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look.
What Is Return On Capital Employed (ROCE)?
If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Wuxi Taclink Optoelectronics Technology is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.021 = CN¥46m ÷ (CN¥2.4b - CN¥253m) (Based on the trailing twelve months to September 2023).
Thus, Wuxi Taclink Optoelectronics Technology has an ROCE of 2.1%. In absolute terms, that's a low return and it also under-performs the Electronic industry average of 5.0%.
View our latest analysis for Wuxi Taclink Optoelectronics Technology
SHSE:688205 Return on Capital Employed December 21st 2023
Above you can see how the current ROCE for Wuxi Taclink Optoelectronics Technology 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 report on analyst forecasts for the company.
What Can We Tell From Wuxi Taclink Optoelectronics Technology's ROCE Trend?
Unfortunately, the trend isn't great with ROCE falling from 19% four years ago, while capital employed has grown 901%. However, some of the increase in capital employed could be attributed to the recent capital raising that's been completed prior to their latest reporting period, so keep that in mind when looking at the ROCE decrease. Wuxi Taclink Optoelectronics Technology probably hasn't received a full year of earnings yet from the new funds it raised, so these figures should be taken with a grain of salt.
On a related note, Wuxi Taclink Optoelectronics Technology has decreased its current liabilities to 10% of total assets. So we could link some of this to the decrease in ROCE. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money.
Our Take On Wuxi Taclink Optoelectronics Technology's ROCE
In summary, Wuxi Taclink Optoelectronics Technology is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. Additionally, the stock's total return to shareholders over the last year has been flat, which isn't too surprising. 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.
If you'd like to know about the risks facing Wuxi Taclink Optoelectronics Technology, we've discovered 4 warning signs that you should be aware of.
If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
もしマルチバッガーを探しているなら、注目すべきいくつかのことがあります。他のことの中で、2つのことを見たいと思います。まず第一に、成長している資本の運用において多くの利益を得るためには、いくつかの点に注意する必要があります。その中でも重要なのは、まず資本の運用による利益の増加と、次に投資信託の額の拡大です。これはつまり、会社が利益を上げ続け、それを再投資できる有望なプロジェクトを持っていることを意味しており、そのような点が複利式機械と呼ばれるものの特徴の一つです。しかし、吳中創新光電科技(上海証券取引所:688205)の収益がどのように推移しているかを一目で見ても、私たちはあまり興奮しません。それでも、もう少し深く見てみましょう。資本の運用におけるリターンまたはROCE(Return on Capital Employed)を知らない場合は、これは会社が事業に投じた資本のうちどの程度の「リターン(税引き前利益)」を得ているかを測定するものです。吳中創新光電科技に適用する計算式は次のとおりです。リターン率＝利益（利息と税金を除く）÷（総資産-流動負債）。0.021＝CN¥4,600万÷（CN¥24億-CN¥2.53億）(2023年9月の過去12ヶ月を基準とした)です。言い換えれば、吳中創新光電科技は2.1%のROCEを持っており、それは計り知れない利益ではありますが、5.0%という電子業界の平均に及ぶことはありません。資本の運用額が増加しているにもかかわらず、ROCEが低下していることが分かる吳中創新光電科技の以前のリターンと比較した現在のROCEを見ることができます。ただし、過去のデータからは分からない情報もあります。関心があれば、我々が入手したアナリストの予想を含む弊社の無料レポートで、会社に関するアナリストの予測をご覧になれます。残念ですが、ROCEが4年前の19%から低下しており、一方で投資信託の額は901%増加しています。ただし、資本の増加のいくつかは、直近の報告期限までに実施された最近の資本調達に帰することができるため、ROCE低下を見る際にはそれを念頭に置いてください。吳中創新光電科技は、新資金からの収益にまだ1年間しか影響されていないかもしれないため、これらの数字はある程度慎重に見る必要があります。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会（ASIC）の管理を受けております（AFSL No. 224663）。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会（ASIC）の管理を受けております（AFSL No. 224663）。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
0.021 = CN¥46m ÷ (CN¥2.4b - CN¥253m) (Based on the trailing twelve months to September 2023).
0.021 = CN¥46m ÷ (CN¥2.4b - CN¥253m)(2023年9月の過去12ヶ月を基準とした).
