Optimism for Yee Hop Holdings (HKG:1662) has grown this past week, despite one-year decline in earnings

If you want to compound wealth in the stock market, you can do so by buying an index fund. But if you pick the right individual stocks, you could make more than that. To wit, the Yee Hop Holdings Limited (HKG:1662) share price is 54% higher than it was a year ago, much better than the market decline of around 9.9% (not including dividends) in the same period. So that should have shareholders smiling. Zooming out, the stock is actually down 37% in the last three years.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

View our latest analysis for Yee Hop Holdings

While Yee Hop Holdings made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Yee Hop Holdings grew its revenue by 9.8% last year. That's not a very high growth rate considering it doesn't make profits. The modest growth is probably largely reflected in the share price, which is up 54%. That's not a standout result, but it is solid - much like the level of revenue growth. It could be worth keeping an eye on this one, especially if growth accelerates.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Yee Hop Holdings' financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Yee Hop Holdings has rewarded shareholders with a total shareholder return of 54% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 3% per year over five years. 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 Yee Hop Holdings better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Yee Hop Holdings (of which 1 is significant!) you should know about.

If you are like me, then you will not want to miss this free list of growing companies 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 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.