Despite the downward trend in earnings at Beijing Shengtong Printing (SZSE:002599) the stock rallies 10%, bringing five-year gains to 178%

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. Long term Beijing Shengtong Printing Co., Ltd (SZSE:002599) shareholders would be well aware of this, since the stock is up 177% in five years. And in the last month, the share price has gained 43%.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

See our latest analysis for Beijing Shengtong Printing

Given that Beijing Shengtong Printing only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

For the last half decade, Beijing Shengtong Printing can boast revenue growth at a rate of 3.3% per year. That's not a very high growth rate considering the bottom line. So we wouldn't have expected to see the share price to have lifted 23% for each year during that time, but that's what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It may be that the market is pretty optimistic about Beijing Shengtong Printing.

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

It is of course excellent to see how Beijing Shengtong Printing has grown profits over the years, but the future is more important for shareholders. This free interactive report on Beijing Shengtong Printing's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Beijing Shengtong Printing has rewarded shareholders with a total shareholder return of 92% in the last twelve months. That's including the dividend. That gain is better than the annual TSR over five years, which is 23%. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Beijing Shengtong Printing (at least 1 which is significant) , and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are 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.