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Taking the occasional loss comes part and parcel with investing on the stock market. Anyone who held Tongda Hong Tai Holdings Limited (HKG:2363) over the last year knows what a loser feels like. The share price is down a hefty 51% in that time. 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. The falls have accelerated recently, with the share price down 18% in the last three months. But this could be related to the weak market, which is down 10% in the same period.
See 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last twelve months, Tongda Hong Tai Holdings increased its revenue by 5.0%. While that may seem decent it isn't great considering the company is still making a loss. It's likely this muted growth has contributed to the share price decline of 51% in the last year. Like many holders, we really want to see better revenue growth in companies that lose money. Of course, the market can be too impatient at times. Why not take a closer look at this one so you're ready to pounce if growth does accelerate.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized 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
We doubt Tongda Hong Tai Holdings shareholders are happy with the loss of 51% over twelve months. That falls short of the market, which lost 15%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 18% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 5 warning signs for Tongda Hong Tai Holdings (2 can't be ignored) that you should be aware of.