Jiangxi Haiyuan Composites TechnologyLtd (SZSE:002529 shareholders incur further losses as stock declines 13% this week, taking three-year losses to 71%

While not a mind-blowing move, it is good to see that the Jiangxi Haiyuan Composites Technology Co.,Ltd. (SZSE:002529) share price has gained 24% in the last three months. But that is meagre solace in the face of the shocking decline over three years. To wit, the share price sky-dived 71% in that time. Arguably, the recent bounce is to be expected after such a bad drop. Of course the real question is whether the business can sustain a turnaround.

If the past week is anything to go by, investor sentiment for Jiangxi Haiyuan Composites TechnologyLtd isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Jiangxi Haiyuan Composites TechnologyLtd

Jiangxi Haiyuan Composites TechnologyLtd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years, Jiangxi Haiyuan Composites TechnologyLtd's revenue dropped 4.2% per year. That's not what investors generally want to see. The share price fall of 19% (per year, over three years) is a stern reminder that money-losing companies are expected to grow revenue. This business clearly needs to grow revenues if it is to perform as investors hope. Don't let a share price decline ruin your calm. You make better decisions when you're calm.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

A Different Perspective

Jiangxi Haiyuan Composites TechnologyLtd shareholders are down 28% for the year, but the market itself is up 10%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 8%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Jiangxi Haiyuan Composites TechnologyLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for Jiangxi Haiyuan Composites TechnologyLtd (1 is a bit unpleasant) that you should be aware of.

We will like Jiangxi Haiyuan Composites TechnologyLtd better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.