Chongqing Wanli New Energy (SHSE:600847 investor three-year losses grow to 47% as the stock sheds CN¥164m this past week

While not a mind-blowing move, it is good to see that the Chongqing Wanli New Energy Co., Ltd. (SHSE:600847) share price has gained 18% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 47% in the last three years, significantly under-performing the market.

Since Chongqing Wanli New Energy has shed CN¥164m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for Chongqing Wanli New Energy

Given that Chongqing Wanli New Energy 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 the last three years, Chongqing Wanli New Energy's revenue dropped 1.4% per year. That is not a good result. The annual decline of 14% per year in that period has clearly disappointed holders. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Chongqing Wanli New Energy's earnings, revenue and cash flow.

A Different Perspective

Investors in Chongqing Wanli New Energy had a tough year, with a total loss of 19%, against a market gain of about 12%. 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 3% 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. It's always interesting to track share price performance over the longer term. But to understand Chongqing Wanli New Energy better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Chongqing Wanli New Energy .

But note: Chongqing Wanli New Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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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.