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Investors in Kaiser (China) Culture (SZSE:002425) From Five Years Ago Are Still Down 52%, Even After 23% Gain This Past Week

Simply Wall St ·  Mar 13 19:04

This month, we saw the Kaiser (China) Culture Co., LTD (SZSE:002425) up an impressive 59%. But that doesn't change the fact that the returns over the last half decade have been disappointing. The share price has failed to impress anyone , down a sizable 52% during that time. So we're hesitant to put much weight behind the short term increase. Of course, this could be the start of a turnaround.

Although the past week has been more reassuring for shareholders, they're still in the red over the last five years, so let's see if the underlying business has been responsible for the decline.

Because Kaiser (China) Culture 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.

Over half a decade Kaiser (China) Culture reduced its trailing twelve month revenue by 6.8% for each year. While far from catastrophic that is not good. With neither profit nor revenue growth, the loss of 9% per year doesn't really surprise us. The chance of imminent investor enthusiasm for this stock seems slimmer than Louise Brooks. Ultimately, it may be worth watching - should revenue pick up, the share price might follow.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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SZSE:002425 Earnings and Revenue Growth March 13th 2024

If you are thinking of buying or selling Kaiser (China) Culture stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 11% in the twelve months, Kaiser (China) Culture shareholders did even worse, losing 22%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 9% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Kaiser (China) Culture better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Kaiser (China) Culture (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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