Haibo Heavy Engineering Science and Technology (SZSE:300517) earnings and shareholder returns have been trending downwards for the last year, but the stock hikes 31% this past week

Haibo Heavy Engineering Science and Technology Co., Ltd. (SZSE:300517) shareholders are doubtless heartened to see the share price bounce 31% in just one week. But that doesn't change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 26% in the last year, significantly under-performing the market.

The recent uptick of 31% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Haibo Heavy Engineering Science and Technology

We don't think that Haibo Heavy Engineering Science and Technology's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In just one year Haibo Heavy Engineering Science and Technology saw its revenue fall by 21%. That's not what investors generally want to see. The stock price has languished lately, falling 26% in a year. What would you expect when revenue is falling, and it doesn't make a profit? It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

This free interactive report on Haibo Heavy Engineering Science and Technology's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 6.0% in the twelve months, Haibo Heavy Engineering Science and Technology shareholders did even worse, losing 26% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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 - Haibo Heavy Engineering Science and Technology has 3 warning signs (and 2 which are a bit concerning) we think you should know about.

But note: Haibo Heavy Engineering Science and Technology 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.