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Did Business Growth Power Ling Yui Holdings's (HKG:784) Share Price Gain of 222%?

Simply Wall St

Ling Yui Holdings Limited (HKG:784) shareholders might understandably be very concerned that the share price has dropped 56% in the last quarter. On the other hand, over the last twelve months the stock has delivered rather impressive returns. Indeed, the share price is up an impressive 222% in that time. So we think most shareholders won't be too upset about the recent fall. Only time will tell if there is still too much optimism currently reflected in the share price.

View our latest analysis for Ling Yui Holdings

Ling Yui 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. Shareholders of unprofitable companies usually expect strong 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 Ling Yui Holdings saw its revenue grow by 34%. That's a fairly respectable growth rate. The revenue growth is decent but the share price had an even better year, gaining 222%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. Of course, we are always cautious about succumbing to 'fear of missing out' when a stock has shot up strongly.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

SEHK:784 Income Statement April 1st 2020

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's nice to see that Ling Yui Holdings shareholders have gained 222% over the last year. We regret to report that the share price is down 56% over ninety days. Shorter term share price moves often don't signify much about the business itself. 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. Case in point: We've spotted 4 warning signs for Ling Yui Holdings you should be aware of, and 1 of them is a bit unpleasant.

If you are like me, then you will not want to miss this free list of growing companies 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 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.