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China Brilliant Global (HKG:8026) Shareholders Will Want The ROCE Trajectory To Continue

Simply Wall St · 12/30/2025 22:11

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, China Brilliant Global (HKG:8026) looks quite promising in regards to its trends of return on capital.

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Understanding 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. To calculate this metric for China Brilliant Global, this is the formula:

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

0.033 = HK$11m ÷ (HK$373m - HK$31m) (Based on the trailing twelve months to September 2025).

Thus, China Brilliant Global has an ROCE of 3.3%. In absolute terms, that's a low return and it also under-performs the Retail Distributors industry average of 6.9%.

View our latest analysis for China Brilliant Global

roce
SEHK:8026 Return on Capital Employed December 30th 2025

Historical performance is a great place to start when researching a stock so above you can see the gauge for China Brilliant Global's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of China Brilliant Global.

The Trend Of ROCE

The fact that China Brilliant Global is now generating some pre-tax profits from its prior investments is very encouraging. The company was generating losses five years ago, but now it's earning 3.3% which is a sight for sore eyes. In addition to that, China Brilliant Global is employing 324% more capital than previously which is expected of a company that's trying to break into profitability. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, both common traits of a multi-bagger.

Our Take On China Brilliant Global's ROCE

To the delight of most shareholders, China Brilliant Global has now broken into profitability. Given the stock has declined 19% in the last five years, this could be a good investment if the valuation and other metrics are also appealing. So researching this company further and determining whether or not these trends will continue seems justified.

If you want to know some of the risks facing China Brilliant Global we've found 2 warning signs (1 is a bit concerning!) that you should be aware of before investing here.

While China Brilliant Global isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.