Shareholders in Zhejiang Bangjie Holding GroupLtd (SZSE:002634) have lost 44%, as stock drops 13% this past week

It is doubtless a positive to see that the Zhejiang Bangjie Holding Group Co.,Ltd (SZSE:002634) share price has gained some 42% in the last three months. But over the last half decade, the stock has not performed well. In fact, the share price is down 44%, which falls well short of the return you could get by buying an index fund.

Since Zhejiang Bangjie Holding GroupLtd has shed CN¥270m 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 Zhejiang Bangjie Holding GroupLtd

Given that Zhejiang Bangjie Holding GroupLtd 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over five years, Zhejiang Bangjie Holding GroupLtd grew its revenue at 11% per year. That's a fairly respectable growth rate. Shareholders have seen the share price fall at 7% per year, for five years: a poor performance. Those who bought back then clearly believed in stronger growth - and maybe even profits. There is always a big risk of losing money yourself when you buy shares in a company that loses money.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at Zhejiang Bangjie Holding GroupLtd's financial health with this free report on its balance sheet.

A Different Perspective

Zhejiang Bangjie Holding GroupLtd shareholders are down 39% for the year, but the market itself is up 14%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 2 warning signs for Zhejiang Bangjie Holding GroupLtd that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.