Xinjiang Machinery Research Institute (SZSE:300159 investor three-year losses grow to 31% as the stock sheds CN¥1.1b this past week

It is doubtless a positive to see that the Xinjiang Machinery Research Institute Co., Ltd. (SZSE:300159) share price has gained some 36% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. In fact, the share price is down 31% in the last three years, falling well short of the market return.

Since Xinjiang Machinery Research Institute has shed CN¥1.1b 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 Xinjiang Machinery Research Institute

Given that Xinjiang Machinery Research Institute 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. 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.

In the last three years Xinjiang Machinery Research Institute saw its revenue shrink by 10% per year. That is not a good result. The annual decline of 9% per year in that period has clearly disappointed holders. That makes sense given the lack of either profits or revenue growth. Of course, sentiment could become too negative, and the company may actually be making progress to profitability.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Xinjiang Machinery Research Institute's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Xinjiang Machinery Research Institute has rewarded shareholders with a total shareholder return of 20% in the last twelve months. That certainly beats the loss of about 4% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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 - Xinjiang Machinery Research Institute has 2 warning signs we think you should be aware of.

But note: Xinjiang Machinery Research Institute 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.