WEBULL

Shareholders in Hony Media Group (HKG:419) have lost 82%, as stock drops 13% this past week

Simply Wall St · 1d ago

Long term investing works well, but it doesn't always work for each individual stock. It hits us in the gut when we see fellow investors suffer a loss. Spare a thought for those who held Hony Media Group (HKG:419) for five whole years - as the share price tanked 82%. And some of the more recent buyers are probably worried, too, with the stock falling 49% in the last year. The falls have accelerated recently, with the share price down 39% in the last three months. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

With the stock having lost 13% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

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Hony Media Group isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over five years, Hony Media Group grew its revenue at 31% per year. That's better than most loss-making companies. So it's not at all clear to us why the share price sunk 13% throughout that time. You'd have to assume the market is worried that profits won't come soon enough. We'd recommend carefully checking for indications of future growth - and balance sheet threats - before considering a purchase.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
SEHK:419 Earnings and Revenue Growth December 29th 2025

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

A Different Perspective

While the broader market gained around 32% in the last year, Hony Media Group shareholders lost 49%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 13% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Hony Media Group has 4 warning signs (and 2 which make us uncomfortable) we think you should know about.

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