Stock Analysis

Yeahka (HKG:9923) shareholders notch a 26% return over 1 year, yet earnings have been shrinking

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SEHK:9923
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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. To wit, the Yeahka Limited (HKG:9923) share price is 26% higher than it was a year ago, much better than the market decline of around 7.9% (not including dividends) in the same period. So that should have shareholders smiling. We'll need to follow Yeahka for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

View our latest analysis for Yeahka

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year, Yeahka actually saw its earnings per share drop 63%.

This means it's unlikely the market is judging the company based on earnings growth. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.

We think that the revenue growth of 26% could have some investors interested. We do see some companies suppress earnings in order to accelerate revenue growth.

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:9923 Earnings and Revenue Growth January 27th 2023

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Yeahka boasts a total shareholder return of 26% for the last year. And the share price momentum remains respectable, with a gain of 55% in the last three months. This suggests the company is continuing to win over new investors. 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. Case in point: We've spotted 3 warning signs for Yeahka 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.

Valuation is complex, but we're helping make it simple.

Find out whether Yeahka is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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