How Much Did Loto Interactive's(HKG:8198) Shareholders Earn From Share Price Movements Over The Last Five Years?

By
Simply Wall St
Published
May 30, 2021
SEHK:8198
Source: Shutterstock

Generally speaking long term investing is the way to go. But no-one is immune from buying too high. Zooming in on an example, the Loto Interactive Limited (HKG:8198) share price dropped 65% in the last half decade. We certainly feel for shareholders who bought near the top. Shareholders have had an even rougher run lately, with the share price down 31% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

See our latest analysis for Loto Interactive

Because Loto Interactive 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, Loto Interactive grew its revenue at 49% per year. That's well above most other pre-profit companies. In contrast, the share price is has averaged a loss of 10% per year - that's quite disappointing. This could mean high expectations have been tempered, potentially because investors are looking to the bottom line. Given the revenue growth we'd consider the stock to be quite an interesting prospect if the company has a clear path to profitability.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
SEHK:8198 Earnings and Revenue Growth May 31st 2021

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

We're pleased to report that Loto Interactive shareholders have received a total shareholder return of 57% over one year. That certainly beats the loss of about 10% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 5 warning signs for Loto Interactive (3 shouldn't be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

If you’re looking to trade a wide range of investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.