Stock Analysis

Does Khoon Group's (HKG:924) Share Price Gain of 14% Match Its Business Performance?

SEHK:924
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We believe investing is smart because history shows that stock markets go higher in the long term. But if when you choose to buy stocks, some of them will be below average performers. Over the last year the Khoon Group Limited (HKG:924) share price is up 14%, but that's less than the broader market return. Khoon Group hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Khoon Group

Given that Khoon Group only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Khoon Group actually shrunk its revenue over the last year, with a reduction of 50%. Given the revenue reduction the modest 14% share price rise over the year seems pretty decent. Generally we're pretty unenthusiastic about loss making stocks that are not growing revenue.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
SEHK:924 Earnings and Revenue Growth March 10th 2021

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Khoon Group shareholders have gained 14% for the year. Unfortunately this falls short of the market return of around 26%. That's a lot better than the more recent three month gain of 1.1%, implying that share price has plateaued recently, for now. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). It's always interesting to track share price performance over the longer term. But to understand Khoon Group better, we need to consider many other factors. For example, we've discovered 4 warning signs for Khoon Group (1 is a bit concerning!) that you should be aware of before investing here.

Of course Khoon 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 HK exchanges.

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Valuation is complex, but we're helping make it simple.

Find out whether Khoon Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. 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.
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