Mooreast Holdings (Catalist:1V3) May Have Issues Allocating Its Capital

If you’re viewing for a multi-bagger, there’s a few things to keep an eye out for. Amongst other things, we’ll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company’s amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. Having stated that, from a first glance at Mooreast Holdings (Catalist:1V3) we aren’t jumping out of our chairs at how returns are trconcludeing, but let’s have a deeper view.

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Just to clarify if you’re unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts utilize this formula to calculate it for Mooreast Holdings:

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

0.053 = S$3.3m ÷ (S$77m – S$16m) (Based on the trailing twelve months to June 2025).

Thus, Mooreast Holdings has an ROCE of 5.3%. On its own that’s a low return on capital but it’s in line with the industest’s average returns of 5.2%.

Check out our latest analysis for Mooreast Holdings

While the past is not representative of the future, it can be assistful 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 Mooreast Holdings.

We weren’t thrilled with the trconclude becautilize Mooreast Holdings’ ROCE has reduced by 49% over the last five years, while the business employed 137% more capital. Usually this isn’t ideal, but given Mooreast Holdings conducted a capital raising before their most recent earnings announcement, that would’ve likely contributed, at least partially, to the increased capital employed figure. Mooreast Holdings probably hasn’t received a full year of earnings yet from the new funds it raised, so these figures should be taken with a grain of salt.

In summary, despite lower returns in the short term, we’re encouraged to see that Mooreast Holdings is reinvesting for growth and has higher sales as a result. In light of this, the stock has only gained 12% over the last three years. Therefore we’d recommconclude viewing further into this stock to confirm if it has the buildings of a good investment.