The 12% return this week takes Jinfa Labi Maternity & Baby Articles' (SZSE:002762) shareholders five-year gains to 51%

It might be of some concern to shareholders to see the Jinfa Labi Maternity & Baby Articles Co., Ltd (SZSE:002762) share price down 10% in the last month. On the bright side the returns have been quite good over the last half decade. After all, the share price is up a market-beating 45% in that time. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 19% drop, in the last year.

The past week has proven to be lucrative for Jinfa Labi Maternity & Baby Articles investors, so let's see if fundamentals drove the company's five-year performance.

See our latest analysis for Jinfa Labi Maternity & Baby Articles

Jinfa Labi Maternity & Baby Articles wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last half decade Jinfa Labi Maternity & Baby Articles' revenue has actually been trending down at about 17% per year. Despite the lack of revenue growth, the stock has returned a respectable 8%, compound, over that time. It's probably worth checking other factors such as the profitability, to try to understand the share price action. It may not be reflecting the revenue.

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

This free interactive report on Jinfa Labi Maternity & Baby Articles' balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Jinfa Labi Maternity & Baby Articles' TSR for the last 5 years was 51%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

While the broader market gained around 6.4% in the last year, Jinfa Labi Maternity & Baby Articles shareholders lost 19% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 9% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Jinfa Labi Maternity & Baby Articles better, we need to consider many other factors. Take risks, for example - Jinfa Labi Maternity & Baby Articles has 2 warning signs we think you should be aware of.

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.