Nine Dragons Paper (Holdings) Limited (HKG:2689) shareholders should be happy to see the share price up 26% in the last month. But that doesn't change the fact that the returns over the last three years have been disappointing. Tragically, the share price declined 67% in that time. So it's good to see it climbing back up. While many would remain nervous, there could be further gains if the business can put its best foot forward.
Although the past week has been more reassuring for shareholders, they're still in the red over the last three years, so let's see if the underlying business has been responsible for the decline.
Given that Nine Dragons Paper (Holdings) didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years Nine Dragons Paper (Holdings) saw its revenue shrink by 1.1% per year. That is not a good result. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 19% per year. Having said that, if growth is coming in the future, now may be the low ebb for the company. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Nine Dragons Paper (Holdings) is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Nine Dragons Paper (Holdings) in this interactive graph of future profit estimates.
What About The Total Shareholder Return (TSR)?
Investors should note that there's a difference between Nine Dragons Paper (Holdings)'s total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that Nine Dragons Paper (Holdings)'s TSR, which was a 65% drop over the last 3 years, was not as bad as the share price return.
A Different Perspective
Nine Dragons Paper (Holdings) shareholders are down 20% for the year, but the market itself is up 3.8%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Nine Dragons Paper (Holdings) you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.
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Nine Dragons Paper(Holdings)Limited(HKG:2689)の株主は、過去1か月で株価が26%上昇していることを喜んでいるはずです。ただし、過去3年間のリターンが失望を招いたという事実は変わりません。残念ながら、その期間に株価は67%下落しました。再び上昇しているのを見るのは良いことです。多くの人が神経質になるかもしれませんが、このビジネスがベストを尽くせば、さらなる利益が見込まれます。
Nine Dragons Paper(Holdings)の株主は今年20%減少していますが、市場自体は3.8%上昇しています。良い株価でさえ、株式の基本的なメトリックスの改善を見るまで興味を持つ前に、ビジネスのパフォーマンスに関する洞察を得る必要があります。残念ながら、昨年のパフォーマンスは、株主が5年間で年率5%の完全損失に直面するという、悪い走りを締めくくりました。一般的に、長期の株価の弱点は悪い兆候であり、投資家は回復を期待してこの株式を調査するかもしれません。ビジネスパフォーマンスの代理として、長期の株価動向を見ることは非常に興味深いことです。しかし、真の洞察を得るためには、他の情報も考慮する必要があります。リスクを考えてみましょう。すべての企業にリスクがあり、私たちはNine Dragons Paper(Holdings)の警告サインを1つ見つけました。