Yamada Green Resources: Driving Growth in Returns on Capital

Yamada Green Resources Ltd (BJV:SES), a leading grower, manufacturer, and supplier of fresh and processed agricultural products in China, has been focusing on strategies to drive growth in returns on capital. The company's efforts have been paying off, as evidenced by its strong financial performance and growth in returns on capital.

One of the key strategies implemented by Yamada Green Resources is the focus on the Processed Food segment, which consists of processed vegetable products and dietary fiber food products. This segment has a gross margin of 75.16%, indicating a high profitability for the company. Additionally, the company has a strong return on invested capital (ROIC) of 0.68% and a return on capital employed (ROCE) of 1.06%, which suggests that the company is effectively utilizing its capital to generate profits.

Another strategy implemented by Yamada Green Resources is the focus on the Investment Properties segment. The company has a current ratio of 3.88, which indicates a strong liquidity position and the ability to meet short-term obligations. This segment also has a quick ratio of 3.87, which further supports the company's liquidity position.



However, Yamada Green Resources faces some challenges in maintaining and further improving its returns on capital. One of the main challenges is the company's negative net income of SGD 6.24 million in the last 12 months, which suggests that the company is not generating enough profits to cover its costs and investments. Additionally, the company's negative pretax margin of -223.51% and negative profit margin of -195.07% further highlight its poor profitability.

To address these challenges, Yamada Green Resources should focus on improving its operational efficiency, reducing costs, and increasing sales. This could involve strategic planning, cost-cutting measures, and exploring new revenue streams. Additionally, the company should reassess its investment decisions to ensure that they are generating adequate returns.

In conclusion, Yamada Green Resources has implemented several strategies to drive growth in returns on capital, including a focus on the Processed Food segment and the Investment Properties segment. However, the company faces some challenges in maintaining and further improving its returns on capital, such as its negative net income and poor profitability. To address these challenges, Yamada Green Resources should focus on improving its operational efficiency, reducing costs, and increasing sales. By doing so, the company can work towards enhancing its financial performance and long-term sustainability.