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Despite shrinking by CN¥2.2b in the past week, Hangzhou Huaxing Chuangye Communication Technology (SZSE:300025) shareholders are still up 111% over 3 years
It certainly was a quite a shock to see the Hangzhou Huaxing Chuangye Communication Technology Co., Ltd. (SZSE:300025) share price fall -31% in the last week. But in three years the returns have been great. The share price marched upwards over that time, and is now 111% higher than it was. So the recent fall in the share price should be viewed in that context. Only time will tell if there is still too much optimism currently reflected in the share price.
While the stock has fallen 31% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.
Check out our latest analysis for Hangzhou Huaxing Chuangye Communication Technology
Because Hangzhou Huaxing Chuangye Communication Technology 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
In the last 3 years Hangzhou Huaxing Chuangye Communication Technology saw its revenue shrink by 0.6% per year. So the share price gain of 28% per year is quite surprising. It's a good reminder that expectations about the future, not the past history, always impact share prices.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Hangzhou Huaxing Chuangye Communication Technology's financial health with this free report on its balance sheet.
A Different Perspective
It's good to see that Hangzhou Huaxing Chuangye Communication Technology has rewarded shareholders with a total shareholder return of 8.6% in the last twelve months. However, that falls short of the 12% TSR per annum it has made for shareholders, each year, over five years. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 2 warning signs for Hangzhou Huaxing Chuangye Communication Technology that you should be aware of.
If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.
Valuation is complex, but we're here to simplify it.
Discover if Hangzhou Huaxing Chuangye Communication Technology might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.
About SZSE:300025
Hangzhou Huaxing Chuangye Communication Technology
Hangzhou Huaxing Chuangye Communication Technology Co., Ltd.
Excellent balance sheet very low.