Jeju Semiconductor (KOSDAQ:080220) Is Doing The Right Things To Multiply Its Share Price

There are a few key trends to look for if we want to identify the next multi-bagger. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount 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. So when we looked at Jeju Semiconductor (KOSDAQ:080220) and its trend of ROCE, we really liked what we saw.

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Understanding Return On Capital Employed (ROCE)

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Jeju Semiconductor:

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

0.10 = ₩22b ÷ (₩307b - ₩88b) (Based on the trailing twelve months to September 2025).

Therefore, Jeju Semiconductor has an ROCE of 10%. In absolute terms, that's a satisfactory return, but compared to the Semiconductor industry average of 7.3% it's much better.

Check out our latest analysis for Jeju Semiconductor

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Jeju Semiconductor.

How Are Returns Trending?

We like the trends that we're seeing from Jeju Semiconductor. Over the last five years, returns on capital employed have risen substantially to 10%. The amount of capital employed has increased too, by 78%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.

On a related note, the company's ratio of current liabilities to total assets has decreased to 29%, which basically reduces it's funding from the likes of short-term creditors or suppliers. This tells us that Jeju Semiconductor has grown its returns without a reliance on increasing their current liabilities, which we're very happy with.

What We Can Learn From Jeju Semiconductor's ROCE

All in all, it's terrific to see that Jeju Semiconductor is reaping the rewards from prior investments and is growing its capital base. And a remarkable 463% total return over the last five years tells us that investors are expecting more good things to come in the future. Therefore, we think it would be worth your time to check if these trends are going to continue.

While Jeju Semiconductor looks impressive, no company is worth an infinite price. The intrinsic value infographic for A080220 helps visualize whether it is currently trading for a fair price.

While Jeju Semiconductor may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.

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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.