If you love investing in stocks you’re bound to buy some losers. But the long term shareholders of Shanghai Qingpu Fire-Fighting Equipment Co., Ltd. (HKG:8115) have had an unfortunate run in the last three years. Unfortunately, they have held through a 56% decline in the share price in that time.
See our latest analysis for Shanghai Qingpu Fire-Fighting Equipment
Given that Shanghai Qingpu Fire-Fighting Equipment didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. 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.
Over three years, Shanghai Qingpu Fire-Fighting Equipment grew revenue at 1.4% per year. That’s not a very high growth rate considering it doesn’t make profits. It’s likely this weak growth has contributed to an annualised return of 24% for the last three years. It can be well worth keeping an eye on growth stocks that disappoint the market, because sometimes they re-accelerate. After all, growing a business isn’t easy, and the process will not always be smooth.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
SEHK:8115 Income Statement, March 10th 2020
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. It might be well worthwhile taking a look at our free report on Shanghai Qingpu Fire-Fighting Equipment’s earnings, revenue and cash flow.
A Different Perspective
It’s nice to see that Shanghai Qingpu Fire-Fighting Equipment shareholders have received a total shareholder return of 16% over the last year. That certainly beats the loss of about 7.7% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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. Like risks, for instance. Every company has them, and we’ve spotted 2 warning signs for Shanghai Qingpu Fire-Fighting Equipment (of which 1 doesn’t sit too well with us!) you should know about.
But note: Shanghai Qingpu Fire-Fighting Equipment may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.