It’s a pleasure to report that Jinhui Holdings Company Limited (HKG: 137) increased 47% in the last quarter. But that does not help the fact that the three-year return is less impressive. After all, the share price has fallen 24% in the last three years, which significantly underperforms the market.
As Jinhui Holdings has not made a profit in the last twelve months, we will focus on revenue growth to get a quick overview of its business development. In general, non-profit companies are expected to increase revenue each year and with a good cut. This is because rapid revenue growth can easily be extrapolated to expected profits, often of significant size.
Over the past three years, Jinhui Holding’s revenue has fallen 6.6% per year. That is not a good result. The stock has disappointed holders over the past three years and has fallen by 8%, annually. It makes sense given the lack of either profit or revenue growth. Of course, emotions can get too negative, and the company may be able to make progress in terms of profitability.
You can see below how earnings and revenue have changed over time (find the exact values by clicking on the image).
Balance strength is crucial. It may be worth taking a look at ours for free report on how its financial position has changed over time.
Jinhui Holding’s shareholders achieved a total return of 11% during the year. But it was less than the market average. On the bright side, it is still a gain, and it is certainly better than the annual loss of approx. 4% endured over half a decade. So this may be a sign that the company has turned its fortune around. It is always interesting to track stock price development in the longer term. But to better understand Jinhui Holdings, we need to consider many other factors. Consider, for example, the ever-present ghost of investment risk. We have identified two warning signs with Jinhui Holdings and understanding them should be part of your investment process.
If you’re like me, you will too does not will miss this for free list of growing companies that insiders buy.
Note that the market return quoted in this article reflects the market-weighted average return on equities currently trading on HK stock exchanges.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any shares and does not take into account your goals or your financial situation. We strive to provide you with long-term focused analysis driven by basic data. Please note that our analysis may not include the latest price sensitive company announcements or qualitative material. Simply Wall St has no position in the mentioned stocks.
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