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The Lai Group Holding (HKG:8455) Share Price Is Down 61% So Some Shareholders Are Wishing They Sold

The nature of investing is that you win some, and you lose some. And there's no doubt that Lai Group Holding Company Limited (HKG:8455) stock has had a really bad year. To wit the share price is down 61% in that time. Lai Group Holding may have better days ahead, of course; we've only looked at a one year period. Furthermore, it's down 22% in about a quarter. That's not much fun for holders.

View our latest analysis for Lai Group Holding

Because Lai Group Holding made a loss in the last twelve months, 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. 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 year Lai Group Holding saw its revenue grow by 4.7%. While that may seem decent it isn't great considering the company is still making a loss. Without profits, and with revenue growth sluggish, you get a 61% loss for shareholders, over the year. We'd want to see evidence that future revenue growth will be stronger before getting too interested. 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 company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

SEHK:8455 Income Statement, January 22nd 2020
SEHK:8455 Income Statement, January 22nd 2020

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Lai Group Holding's earnings, revenue and cash flow.

A Different Perspective

While Lai Group Holding shareholders are down 61% for the year, the market itself is up 8.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 22% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand Lai Group Holding better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Lai Group Holding (of which 1 is a bit unpleasant!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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 editorial-team@simplywallst.com. 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.