Does China Shandong Hi-Speed Financial Group's (HKG:412) Share Price Gain of 70% Match Its Business Performance?

By
Simply Wall St
Published
March 07, 2021
SEHK:412

The China Shandong Hi-Speed Financial Group Limited (HKG:412) share price has had a bad week, falling 18%. But that doesn't change the fact that the returns over the last year have been pleasing. In that time we've seen the stock easily surpass the market return, with a gain of 70%.

Check out our latest analysis for China Shandong Hi-Speed Financial Group

Because China Shandong Hi-Speed Financial Group 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year China Shandong Hi-Speed Financial Group saw its revenue grow by 62%. That's stonking growth even when compared to other loss-making stocks. The solid 70% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. If that's the case, now might be the time to take a close look at China Shandong Hi-Speed Financial Group. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
SEHK:412 Earnings and Revenue Growth March 8th 2021

Take a more thorough look at China Shandong Hi-Speed Financial Group's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that China Shandong Hi-Speed Financial Group shareholders have received a total shareholder return of 70% over the last year. That certainly beats the loss of about 8% 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. It's always interesting to track share price performance over the longer term. But to understand China Shandong Hi-Speed Financial Group better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with China Shandong Hi-Speed Financial Group (including 1 which is potentially serious) .

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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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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