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Introducing YuanShengTai Dairy Farm (HKG:1431), The Stock That Slid 70% In The Last Five Years

Simply Wall St

We think intelligent long term investing is the way to go. But no-one is immune from buying too high. For example the YuanShengTai Dairy Farm Limited (HKG:1431) share price dropped 70% over five years. That is extremely sub-optimal, to say the least. Shareholders have had an even rougher run lately, with the share price down 13% in the last 90 days.

Check out our latest analysis for YuanShengTai Dairy Farm

Given that YuanShengTai Dairy Farm 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 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.

Over five years, YuanShengTai Dairy Farm grew its revenue at 0.1% per year. That's not a very high growth rate considering it doesn't make profits. This lacklustre growth has no doubt fueled the loss of 21% per year, in that time. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in YuanShengTai Dairy Farm. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term).

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

SEHK:1431 Income Statement, February 7th 2020

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

It's good to see that YuanShengTai Dairy Farm has rewarded shareholders with a total shareholder return of 57% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 21% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand YuanShengTai Dairy Farm better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with YuanShengTai Dairy Farm .

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 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.