Hua Medicine (Shanghai) (HKG:2552) Shareholders Booked A 21% Gain In The Last Year

Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. For example, the Hua Medicine (Shanghai) Ltd. (HKG:2552) share price is up 21% in the last year, clearly besting the market return of around 16% (not including dividends). That's a solid performance by our standards! Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.

See our latest analysis for Hua Medicine (Shanghai)

Because Hua Medicine (Shanghai) 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over the last twelve months, Hua Medicine (Shanghai)'s revenue grew by 694%. That's well above most other pre-profit companies. The solid 21% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate Hua Medicine (Shanghai) in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

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

Take a more thorough look at Hua Medicine (Shanghai)'s financial health with this free report on its balance sheet.

A Different Perspective

Hua Medicine (Shanghai) shareholders have gained 21% over twelve months, which isn't far from the market return of 20%. And the stock has been on a nice little run lately, with the price climbing 32% higher in 90 days. It could be that word is spreading about its positive business attributes. It's always interesting to track share price performance over the longer term. But to understand Hua Medicine (Shanghai) better, we need to consider many other factors. Even so, be aware that Hua Medicine (Shanghai) is showing 3 warning signs in our investment analysis , you should know about...

But note: Hua Medicine (Shanghai) may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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