Kim Heng’s Returns on the Rise (Catalist: 5G2)

Kim Heng (Catalist:5G2) is showing promising signs of potential growth in the long term, according to recent trends in return on capital employed (ROCE). ROCE is a key metric that measures a company’s yearly pre-tax profit relative to the capital employed in the business. In the case of Kim Heng, the company has an ROCE of 13%, which is in line with the industry average.

While Kim Heng has historically been unprofitable, the company has recently turned things around and is now earning a solid return on its capital. The company’s efficiency has improved, with higher returns being generated from the same amount of capital. However, it is important to note that the amount of capital employed by Kim Heng has remained flat over the period, indicating that the company may need to consider future investment plans to sustain its growth.

One potential concern for Kim Heng is the noticeable increase in current liabilities, which now fund about 39% of the company’s operations. This could introduce new risks for the business if not managed properly. Despite this, investors seem optimistic about Kim Heng’s future prospects, as the stock has rewarded shareholders with a 69% return over the last five years.

Overall, Kim Heng’s positive trends in ROCE suggest that the company has a strong business model and profitable reinvestment opportunities. Investors may want to further research the company to determine if these trends are likely to continue in the future.