Stock Analysis

Introducing China Regenerative Medicine International (HKG:8158), The Stock That Zoomed 142% In The Last Year

SEHK:8158
Source: Shutterstock

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the China Regenerative Medicine International Limited (HKG:8158) share price had more than doubled in just one year - up 142%. It's also up 75% in about a month. Unfortunately the longer term returns are not so good, with the stock falling 80% in the last three years.

View our latest analysis for China Regenerative Medicine International

Because China Regenerative Medicine International 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last twelve months, China Regenerative Medicine International's revenue grew by 891%. That's a head and shoulders above most loss-making companies. And the share price has responded, gaining 142% as we previously mentioned. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
SEHK:8158 Earnings and Revenue Growth March 16th 2021

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free interactive report on China Regenerative Medicine International's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that China Regenerative Medicine International shareholders have received a total shareholder return of 142% over the last year. Notably the five-year annualised TSR loss of 14% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 4 warning signs for China Regenerative Medicine International (3 can't be ignored!) that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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