Xi'an International Medical Investment (SZSE:000516 investor three-year losses grow to 70% as the stock sheds CN¥541m this past week

It's not possible to invest over long periods without making some bad investments. But really big losses can really drag down an overall portfolio. So spare a thought for the long term shareholders of Xi'an International Medical Investment Company Limited (SZSE:000516); the share price is down a whopping 70% in the last three years. That'd be enough to cause even the strongest minds some disquiet. And over the last year the share price fell 42%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 12% in the last three months.

With the stock having lost 4.1% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

See our latest analysis for Xi'an International Medical Investment

Because Xi'an International Medical Investment made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 three years, Xi'an International Medical Investment grew revenue at 27% per year. That is faster than most pre-profit companies. So why has the share priced crashed 19% per year, in the same time? You'd want to take a close look at the balance sheet, as well as the losses. Ultimately, revenue growth doesn't amount to much if the business can't scale well. Unless the balance sheet is strong, the company might have to raise capital.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on Xi'an International Medical Investment

A Different Perspective

While the broader market lost about 8.9% in the twelve months, Xi'an International Medical Investment 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. On the bright side, long term shareholders have made money, with a gain of 1.9% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Xi'an International Medical Investment better, we need to consider many other factors. Even so, be aware that Xi'an International Medical Investment is showing 1 warning sign in our investment analysis , you should know about...

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.

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.