China Gold International Resources (TSE:CGG) Shareholders Will Want The ROCE Trajectory To Continue

If you're looking for a multi-bagger, there's a few things to keep an eye out for. 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. 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 China Gold International Resources (TSE:CGG) and its trend of ROCE, we really liked what we saw. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Understanding Return On Capital Employed (ROCE) 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 China Gold International Resources is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.14 = US$369m ÷ (US$3.1b - US$505m) (Based on the trailing twelve months to June 2025). Thus, China Gold International Resources has an ROCE of 14%. In absolute terms, that's a satisfactory return, but compared to the Metals and Mining industry average of 8.0% it's much better.

See our latest analysis for China Gold International Resources TSX:CGG Return on Capital Employed October 14th 2025 In the above chart we have measured China Gold International Resources' 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 China Gold International Resources . What The Trend Of ROCE Can Tell Us China Gold International Resources has not disappointed with their ROCE growth. More specifically, while the company has kept capital employed relatively flat over the last five years, the ROCE has climbed 914% in that same time.

So it's likely that the business is now reaping the full benefits of its past investments, since the capital employed hasn't changed considerably. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking. The Bottom Line In summary, we're delighted to see that China Gold International Resources has been able to increase efficiencies and earn higher rates of return on the same amount of capital. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors.

In light of that, we think it's worth looking further into this stock because if China Gold International Resources can keep these trends up, it could have a bright future ahead. Story Continues On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for CGG on our platform that is definitely worth checking out. While China Gold International Resources 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. Have feedback on this article?

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