Shareholders in Tianjin MOTIMO Membrane TechnologyLtd (SZSE:300334) have lost 42%, as stock drops 12% this past week

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Tianjin MOTIMO Membrane Technology Co.,Ltd (SZSE:300334) have tasted that bitter downside in the last year, as the share price dropped 42%. That contrasts poorly with the market decline of 9.6%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 27% in three years. Unfortunately the share price momentum is still quite negative, with prices down 18% in thirty days.

Since Tianjin MOTIMO Membrane TechnologyLtd has shed CN¥199m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Tianjin MOTIMO Membrane TechnologyLtd

Given that Tianjin MOTIMO Membrane TechnologyLtd 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In just one year Tianjin MOTIMO Membrane TechnologyLtd saw its revenue fall by 16%. That looks pretty grim, at a glance. The stock price has languished lately, falling 42% in a year. That seems pretty reasonable given the lack of both profits and revenue growth. It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.

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

Take a more thorough look at Tianjin MOTIMO Membrane TechnologyLtd's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 9.6% in the twelve months, Tianjin MOTIMO Membrane TechnologyLtd shareholders did even worse, losing 42%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% 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. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.