Chanjet Information Technology (HKG:1588 shareholders suffer further losses as shares fall 13% this week, pushing year-on-year losses to 46%

Passive investing in an index fund is a good way to ensure that your own returns roughly match the broader market. Active investors aim to buy stocks that significantly outperform the market – but in the process, they risk underperforming. This downside risk was materialized by Chanjet Information Technology Company Limited (HKG:1588) shareholders over the past year as the share price fell 46%. This is disappointing when you consider that the market is down 19%. Longer-term shareholders have not suffered as much, as the stock has fallen a comparatively less painful 8.0% in three years. Shareholders have had an even tougher race lately, with the share price falling 25% in the past 90 days. However, one could say that the price was influenced by the general market, which is down 13% over the same period.

After losing 13% last week, it’s worth looking at company fundamentals to see what we can infer from past performance.

However, if you prefer to see where opportunities and risks are within the industry of 1588you can check our analysis on the HK software industry.

Chanjet Information Technology has not been profitable for the last twelve months, we are unlikely to see a strong correlation between its stock price and its earnings per share (EPS). Income is arguably our second best option. Shareholders of unprofitable companies generally expect strong revenue growth. Indeed, rapid revenue growth can be easily extrapolated to predict profits, often of considerable size.

Last year, Chanjet Information Technology saw its revenue increase by 37%. That’s certainly a respectable growth rate. Unfortunately, that wasn’t enough to prevent the stock price from falling 46%. This implies that the market expected better growth. But if earnings continue to grow, at some point the stock price will likely follow.

You can see how earnings and income have changed over time below (find out the exact values ​​by clicking on the image).

SEHK: 1588 Earnings and Revenue Growth September 21, 2022

Take a closer look at the financial health of Chanjet Information Technology with this free report on its balance sheet.

A different perspective

We regret to report that Chanjet Information Technology shareholders are down 46% for the year. Unfortunately, this is worse than the general market decline of 19%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Unfortunately, last year’s performance capped a bad patch, with shareholders facing a total loss of 5% per year over five years. Generally speaking, long-term stock price weakness can be a bad sign, although contrarian investors may want to seek out the stock in hopes of a turnaround. You might want to rate this data-rich visualization of its earnings, revenue, and cash flow.

Sure Chanjet Information Technology may not be the best stock to buy. So you might want to see this free collection of growth values.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on HK exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Find out if Chanjet Information Technology is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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