Beijing Aerospace ChangfengLtd (SHSE:600855 shareholders incur further losses as stock declines 7.1% this week, taking five-year losses to 37%

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in Beijing Aerospace Changfeng Co.,Ltd (SHSE:600855), since the last five years saw the share price fall 38%. And the share price decline continued over the last week, dropping some 7.1%.

Since Beijing Aerospace ChangfengLtd has shed CN¥389m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

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Beijing Aerospace ChangfengLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last five years Beijing Aerospace ChangfengLtd saw its revenue shrink by 15% per year. That's definitely a weaker result than most pre-profit companies report. It seems pretty reasonable to us that the share price dipped 7% per year in that time. This loss means the stock shareholders are probably pretty annoyed. Risk averse investors probably wouldn't like this one much.

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

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 Beijing Aerospace ChangfengLtd shareholders have received a total shareholder return of 21% over the last year. That certainly beats the loss of about 7% per year over the last half decade. 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 Beijing Aerospace ChangfengLtd better, we need to consider many other factors. Take risks, for example - Beijing Aerospace ChangfengLtd has 1 warning sign we think you should be aware of.

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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 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.