Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. For example, the Tongda Hong Tai Holdings Limited (HKG:2363) share price is down 40% in the last year. That's well bellow the market return of 2.3%. Tongda Hong Tai Holdings hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. Furthermore, it's down 17% in about a quarter. That's not much fun for holders.

Check out our latest analysis for Tongda Hong Tai Holdings

Tongda Hong Tai 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In just one year Tongda Hong Tai Holdings saw its revenue fall by 7.0%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 40% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Tongda Hong Tai Holdings's earnings, revenue and cash flow.

A Different Perspective

While Tongda Hong Tai Holdings shareholders are down 40% for the year, the market itself is up 2.3%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 17% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. You could get a better understanding of Tongda Hong Tai Holdings's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.