Even after rising 13% this past week, Shenzhen Zhongzhuang Construction GroupLtd (SZSE:002822) shareholders are still down 64% over the past five years

It is doubtless a positive to see that the Shenzhen Zhongzhuang Construction Group Co.,Ltd (SZSE:002822) share price has gained some 77% in the last three months. But that is little comfort to those holding over the last half decade, sitting on a big loss. In fact, the share price has declined rather badly, down some 65% in that time. So we're hesitant to put much weight behind the short term increase. But it could be that the fall was overdone.

On a more encouraging note the company has added CN¥306m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

Check out our latest analysis for Shenzhen Zhongzhuang Construction GroupLtd

Shenzhen Zhongzhuang Construction GroupLtd 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last five years Shenzhen Zhongzhuang Construction GroupLtd saw its revenue shrink by 5.9% per year. While far from catastrophic that is not good. The share price decline of 11% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. We don't think anyone is rushing to buy this stock. Ultimately, it may be worth watching - should revenue pick up, the share price might follow.

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

If you are thinking of buying or selling Shenzhen Zhongzhuang Construction GroupLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Investors in Shenzhen Zhongzhuang Construction GroupLtd had a tough year, with a total loss of 9.8%, against a market gain of about 14%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. However, the loss over the last year isn't as bad as the 10% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 2 warning signs for Shenzhen Zhongzhuang Construction GroupLtd that you should be aware of before investing here.

We will like Shenzhen Zhongzhuang Construction GroupLtd 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.