ZXZN Qi-House Holdings (HKG:8395) shareholder returns have been incredible, earning 769% in 5 years

We think all investors should try to buy and hold high quality multi-year winners. And we've seen some truly amazing gains over the years. To wit, the ZXZN Qi-House Holdings Limited (HKG:8395) share price has soared 757% over five years. If that doesn't get you thinking about long term investing, we don't know what will. In the last week the share price is up 20%. Anyone who held for that rewarding ride would probably be keen to talk about it.

Since the stock has added HK$175m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for ZXZN Qi-House Holdings

ZXZN Qi-House Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope 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 half decade ZXZN Qi-House Holdings' revenue has actually been trending down at about 4.6% per year. This is in stark contrast to the strong share price growth of 54%, compound, per year. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. I think it's fair to say there is probably a fair bit of excitement in the price.

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

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between ZXZN Qi-House Holdings' total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. ZXZN Qi-House Holdings' TSR of 769% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

ZXZN Qi-House Holdings shareholders are down 2.9% for the year, but the market itself is up 16%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 54%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand ZXZN Qi-House Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for ZXZN Qi-House Holdings (1 is concerning) that you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap 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 Hong Kong 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.