Even after rising 12% this past week, Hunan Zhenghong Science and Technology DevelopLtd (SZSE:000702) shareholders are still down 25% over the past year

It's nice to see the Hunan Zhenghong Science and Technology Develop Co.,Ltd. (SZSE:000702) share price up 12% in a week. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 25% in one year, under-performing the market.

While the stock has risen 12% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Hunan Zhenghong Science and Technology DevelopLtd

Given that Hunan Zhenghong Science and Technology DevelopLtd 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. Shareholders of unprofitable companies usually desire strong 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.

Hunan Zhenghong Science and Technology DevelopLtd's revenue didn't grow at all in the last year. In fact, it fell 11%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 25% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.

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

If you are thinking of buying or selling Hunan Zhenghong Science and Technology DevelopLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 18% in the twelve months, Hunan Zhenghong Science and Technology DevelopLtd shareholders did even worse, losing 25%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% 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. It's always interesting to track share price performance over the longer term. But to understand Hunan Zhenghong Science and Technology DevelopLtd better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Hunan Zhenghong Science and Technology DevelopLtd you should be aware of, and 2 of them shouldn't be ignored.

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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.

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