While shareholders of Zhejiang Jindun Fans (SZSE:300411) are in the black over 1 year, those who bought a week ago aren't so fortunate

Zhejiang Jindun Fans Co., Ltd (SZSE:300411) shareholders might be concerned after seeing the share price drop 11% in the last month. On the other hand, over the last twelve months the stock has delivered rather impressive returns. Indeed, the share price is up an impressive 104% in that time. So it is important to view the recent reduction in price through that lense. The real question is whether the business is trending in the right direction.

While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

Check out our latest analysis for Zhejiang Jindun Fans

While Zhejiang Jindun Fans made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over the last twelve months, Zhejiang Jindun Fans' revenue grew by 9.7%. That's not a very high growth rate considering it doesn't make profits. So we wouldn't have expected the share price to rise by 104%. The business will need a lot more growth to justify that increase. We're not so sure that revenue growth is driving the market optimism about the stock.

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

Take a more thorough look at Zhejiang Jindun Fans' financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Zhejiang Jindun Fans shareholders have received a total shareholder return of 104% over one year. That gain is better than the annual TSR over five years, which is 14%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. For example, we've discovered 2 warning signs for Zhejiang Jindun Fans (1 is potentially serious!) that you should be aware of before investing here.

We will like Zhejiang Jindun Fans 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.