Shenzhen China Bicycle Company (Holdings)'s (SZSE:000017) underlying earnings growth outpaced the notable return generated for shareholders over the past three years

The Shenzhen China Bicycle Company (Holdings) Limited (SZSE:000017) share price has had a bad week, falling 14%. But that doesn't change the fact that the returns over the last three years have been pleasing. In fact, the company's share price bested the return of its market index in that time, posting a gain of 69%.

Although Shenzhen China Bicycle Company (Holdings) has shed CN¥689m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for Shenzhen China Bicycle Company (Holdings)

Given that Shenzhen China Bicycle Company (Holdings) 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. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Shenzhen China Bicycle Company (Holdings)'s revenue trended up 40% each year over three years. That's much better than most loss-making companies. While the compound gain of 19% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at Shenzhen China Bicycle Company (Holdings). A window of opportunity may reveal itself with time, if the business can trend to profitability.

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 Shenzhen China Bicycle Company (Holdings)'s financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Shenzhen China Bicycle Company (Holdings) shareholders have received a total shareholder return of 39% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 6% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.