Great China Holdings (Hong Kong) Investor Five-Year Losses Grow To 28%, Stock Sheds HK$64m In A Week

While it may not be enough for some shareholders, we think it is good to see the Great China Holdings (Hong Kong) Limited (HKG:21) share price up 15% in a single quarter. But over the last half decade, the stock has not performed well. After all, the share price is down 28% in that time, significantly under-performing the market.

If the past week is anything to go by, investor sentiment for Great China Holdings (Hong Kong) isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Great China Holdings (Hong Kong)

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During five years of share price growth, Great China Holdings (Hong Kong) moved from a loss to profitability. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics might give us a better handle on how its value is changing over time.

Arguably, the revenue drop of 14% a year for half a decade suggests that the company can't grow in the long term. This has probably encouraged some shareholders to sell down the stock.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Great China Holdings (Hong Kong)'s earnings, revenue and cash flow.

A Different Perspective

Although it hurts that Great China Holdings (Hong Kong) returned a loss of 2.9% in the last twelve months, the broader market was actually worse, returning a loss of 12%. Of far more concern is the 5% p.a. loss served to shareholders over the last five years. While the losses are slowing we doubt many shareholders are happy with the stock. 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 instance, we've identified 3 warning signs for Great China Holdings (Hong Kong) that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.