Investors push Hao Tian International Construction Investment Group (HKG:1341) 8.1% lower this week, company's increasing losses might be to blame

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. Long term Hao Tian International Construction Investment Group Limited (HKG:1341) shareholders would be well aware of this, since the stock is up 163% in five years. On top of that, the share price is up 98% in about a quarter.

In light of the stock dropping 8.1% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return.

View our latest analysis for Hao Tian International Construction Investment Group

Hao Tian International Construction Investment Group isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years Hao Tian International Construction Investment Group saw its revenue shrink by 0.8% per year. On the other hand, the share price done the opposite, gaining 21%, compound, each year. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, we are a bit cautious in this kind of situation.

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

If you are thinking of buying or selling Hao Tian International Construction Investment Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Investors in Hao Tian International Construction Investment Group had a tough year, with a total loss of 12%, against a market gain of about 30%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 21% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Hao Tian International Construction Investment Group 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 Hao Tian International Construction Investment Group , and understanding them should be part of your investment process.

Of course Hao Tian International Construction Investment Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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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.