Yunnan Jinggu ForestryLtd (SHSE:600265) adds CN¥227m to market cap in the past 7 days, though investors from five years ago are still down 24%

It's nice to see the Yunnan Jinggu Forestry Co.,Ltd (SHSE:600265) share price up 11% in a week. But if you look at the last five years the returns have not been good. You would have done a lot better buying an index fund, since the stock has dropped 24% in that half decade.

The recent uptick of 11% could be a positive sign of things to come, so let's take a look at historical fundamentals.

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Yunnan Jinggu ForestryLtd 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. Shareholders of unprofitable companies usually desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over five years, Yunnan Jinggu ForestryLtd grew its revenue at 37% per year. That's well above most other pre-profit companies. The share price drop of 4% per year over five years would be considered let down. So you might argue the Yunnan Jinggu ForestryLtd should get more credit for its rather impressive revenue growth over the period. If that's the case, now might be the smart time to take a close look at it.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Yunnan Jinggu ForestryLtd shareholders gained a total return of 1.4% during the year. But that was short of the market average. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 4% endured over half a decade. So this might be a sign the business has turned its fortunes around. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Yunnan Jinggu ForestryLtd , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.