Jinhai International Group Holdings (HKG:2225) pulls back 14% this week, but still delivers shareholders respectable 74% return over 1 year

By
Simply Wall St
Published
January 10, 2022
SEHK:2225
Source: Shutterstock

The Jinhai International Group Holdings Limited (HKG:2225) share price has had a bad week, falling 14%. But looking back over the last year, the returns have actually been rather pleasing! To wit, it had solidly beat the market, up 74%.

In light of the stock dropping 14% 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 one-year return.

View our latest analysis for Jinhai International Group Holdings

Given that Jinhai International Group Holdings only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. 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.

Jinhai International Group Holdings actually shrunk its revenue over the last year, with a reduction of 55%. Despite the lack of revenue growth, the stock has returned a solid 74% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

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:2225 Earnings and Revenue Growth January 10th 2022

Take a more thorough look at Jinhai International Group Holdings' financial health with this free report on its balance sheet.

A Different Perspective

Pleasingly, Jinhai International Group Holdings' total shareholder return last year was 74%. That's better than the annualized TSR of 6% over the last three years. Given the track record of solid returns over varying time frames, it might be worth putting Jinhai International Group Holdings on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Jinhai International Group Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Jinhai International Group Holdings you should be aware of, and 1 of them is a bit unpleasant.

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 HK exchanges.

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