Khoon Group (HKG:924) shareholders are up 11% this past week, but still in the red over the last year

This week we saw the Khoon Group Limited (HKG:924) share price climb by 11%. But that doesn't change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 36% in the last year, significantly under-performing the market.

On a more encouraging note the company has added HK$50m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

Given that Khoon Group only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Khoon Group grew its revenue by 40% over the last year. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 36%. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.

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.

A Different Perspective

Investors in Khoon Group had a tough year, with a total loss of 36%, against a market gain of about 22%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 3% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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 2 warning signs for Khoon Group (1 is significant) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.