Huasi Holding Company Limited (SZSE:002494) shareholders might be concerned after seeing the share price drop 15% in the last week. But don't let that distract from the very nice return generated over three years. To wit, the share price did better than an index fund, climbing 34% during that period.
Since the long term performance has been good but there's been a recent pullback of 15%, let's check if the fundamentals match the share price.
View our latest analysis for Huasi Holding
Because Huasi Holding made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Huasi Holding actually saw its revenue drop by 3.4% per year over three years. Despite the lack of revenue growth, the stock has returned 10%, compound, over three years. Unless the company is going to make profits soon, we would be pretty cautious about it.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Huasi Holding's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's good to see that Huasi Holding has rewarded shareholders with a total shareholder return of 5.2% in the last twelve months. That certainly beats the loss of about 3% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Huasi Holding better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Huasi Holding you should be aware of, and 1 of them is concerning.
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 Chinese exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.