The one-year returns have been stellar for Kinergy (HKG:3302) shareholders despite underlying losses increasing

Unfortunately, investing is risky - companies can and do go bankrupt. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Kinergy Corporation Ltd. (HKG:3302) share price had more than doubled in just one year - up 158%. And shareholders are doubtless smiling after an even more impressive share price rise of 216% in thirty days. Unfortunately the longer term returns are not so good, with the stock falling 11% in the last three years.

The past week has proven to be lucrative for Kinergy investors, so let's see if fundamentals drove the company's one-year performance.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Given that Kinergy 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. Shareholders of unprofitable companies usually desire strong revenue growth. 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.

Kinergy actually shrunk its revenue over the last year, with a reduction of 1.9%. So we would not have expected the share price to rise 158%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Kinergy's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Kinergy shareholders have received a total shareholder return of 158% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 1.7% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Kinergy better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Kinergy (including 2 which are a bit concerning) .

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.