WEBULL

Under The Bonnet, Simplex Holdings' (TSE:4373) Returns Look Impressive

Simply Wall St · 2d ago

There are a few key trends to look for if we want to identify the next multi-bagger. 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. And in light of that, the trends we're seeing at Simplex Holdings' (TSE:4373) look very promising so lets take a look.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Return On Capital Employed (ROCE): What Is It?

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 Simplex Holdings is:

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

0.22 = JP¥14b ÷ (JP¥78b - JP¥14b) (Based on the trailing twelve months to September 2025).

Therefore, Simplex Holdings has an ROCE of 22%. In absolute terms that's a great return and it's even better than the IT industry average of 16%.

Check out our latest analysis for Simplex Holdings

roce
TSE:4373 Return on Capital Employed January 7th 2026

In the above chart we have measured Simplex Holdings' 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 Simplex Holdings .

What The Trend Of ROCE Can Tell Us

We like the trends that we're seeing from Simplex Holdings. Over the last five years, returns on capital employed have risen substantially to 22%. Basically the business is earning more per dollar of capital invested and in addition to that, 22% more capital is being employed now too. So we're very much inspired by what we're seeing at Simplex Holdings thanks to its ability to profitably reinvest capital.

In Conclusion...

To sum it up, Simplex Holdings has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. And with a respectable 98% awarded to those who held the stock over the last three years, you could argue that these developments are starting to get the attention they deserve. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.

On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for 4373 on our platform that is definitely worth checking out.

If you'd like to see other companies earning high returns, check out our free list of companies earning high returns with solid balance sheets here.