Shares of CMOC Group (03993.HK) soared 5.98% on Monday as investors cheered the company's exceptional ability to generate high and rising returns on its deployed capital.
Analysis showed that CMOC Group currently earns a return on capital employed (ROCE) of 21%, far outpacing the 11% industry average. Even more impressively, the company's ROCE has climbed steadily higher over the past 5 years from already robust levels.
The increasing ROCE trend coupled with CMOC's expanding capital base suggests the company has been able to identify and capitalize on highly profitable reinvestment opportunities. This demonstrated capital compounding skill is a prized trait among growth investors and appears to be driving the surge in CMOC's share price.
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