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Investing in stocks inevitably means buying into some companies that perform poorly. But the long term shareholders of KK Culture Holdings Limited (HKG:550) have had an unfortunate run in the last three years. So they might be feeling emotional about the 63% share price collapse, in that time. And over the last year the share price fell 44%, so we doubt many shareholders are delighted. Furthermore, it's down 18% in about a quarter. That's not much fun for holders. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
See our latest analysis for KK Culture Holdings
Because KK Culture Holdings is loss-making, 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years KK Culture Holdings saw its revenue shrink by 7.3% per year. That is not a good result. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 28% per year. Having said that, if growth is coming in the future, now may be the low ebb for the company. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
What about the Total Shareholder Return (TSR)?
We've already covered KK Culture Holdings's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. KK Culture Holdings hasn't been paying dividends, but its TSR of -63% exceeds its share price return of -63%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
A Different Perspective
While the broader market lost about 5.3% in the twelve months, KK Culture Holdings shareholders did even worse, losing 44%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3.1% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You could get a better understanding of KK Culture Holdings's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.