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Daejoo (KOSDAQ:003310) Shareholders Will Want The ROCE Trajectory To Continue

Simply Wall St · 3d ago

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. With that in mind, we've noticed some promising trends at Daejoo (KOSDAQ:003310) so let's look a bit deeper.

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What Is Return On Capital Employed (ROCE)?

For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Daejoo is:

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

0.11 = ₩11b ÷ (₩114b - ₩14b) (Based on the trailing twelve months to September 2025).

Therefore, Daejoo has an ROCE of 11%. In absolute terms, that's a satisfactory return, but compared to the Food industry average of 6.5% it's much better.

Check out our latest analysis for Daejoo

roce
KOSDAQ:A003310 Return on Capital Employed January 8th 2026

Historical performance is a great place to start when researching a stock so above you can see the gauge for Daejoo's ROCE against it's prior returns. If you're interested in investigating Daejoo's past further, check out this free graph covering Daejoo's past earnings, revenue and cash flow.

What The Trend Of ROCE Can Tell Us

Daejoo is displaying some positive trends. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 11%. Basically the business is earning more per dollar of capital invested and in addition to that, 47% more capital is being employed now too. So we're very much inspired by what we're seeing at Daejoo thanks to its ability to profitably reinvest capital.

One more thing to note, Daejoo has decreased current liabilities to 12% of total assets over this period, which effectively reduces the amount of funding from suppliers or short-term creditors. This tells us that Daejoo has grown its returns without a reliance on increasing their current liabilities, which we're very happy with.

The Bottom Line

In summary, it's great to see that Daejoo can compound returns by consistently reinvesting capital at increasing rates of return, because these are some of the key ingredients of those highly sought after multi-baggers. And with a respectable 41% awarded to those who held the stock over the last five years, you could argue that these developments are starting to get the attention they deserve. Therefore, we think it would be worth your time to check if these trends are going to continue.

On a separate note, we've found 3 warning signs for Daejoo you'll probably want to know about.

For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity.