Changsha DIALINE New Material Sci.&Tech (SZSE:300700) shareholders are up 15% this past week, but still in the red over the last year

It's nice to see the Changsha DIALINE New Material Sci.&Tech. Co., Ltd. (SZSE:300700) share price up 15% in a week. But that doesn't change the reality of under-performance over the last twelve months. In fact the stock is down 48% in the last year, well below the market return.

While the last year has been tough for Changsha DIALINE New Material Sci.&Tech shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

See our latest analysis for Changsha DIALINE New Material Sci.&Tech

Changsha DIALINE New Material Sci.&Tech isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In just one year Changsha DIALINE New Material Sci.&Tech saw its revenue fall by 23%. That's not what investors generally want to see. Shareholders have seen the share price drop 48% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.

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

Take a more thorough look at Changsha DIALINE New Material Sci.&Tech's financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that Changsha DIALINE New Material Sci.&Tech shareholders are down 48% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 6.0%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.8% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Changsha DIALINE New Material Sci.&Tech you should know about.

Of course Changsha DIALINE New Material Sci.&Tech may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.