GuangDong SongYang Recycle ResourcesLTD (SHSE:603863) shareholders are still up 100% over 3 years despite pulling back 11% in the past week

Some GuangDong SongYang Recycle Resources CO.,LTD (SHSE:603863) shareholders are probably rather concerned to see the share price fall 35% over the last three months. But don't let that distract from the very nice return generated over three years. After all, the share price is up a market-beating 100% in that time.

Although GuangDong SongYang Recycle ResourcesLTD has shed CN¥456m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

View our latest analysis for GuangDong SongYang Recycle ResourcesLTD

GuangDong SongYang Recycle ResourcesLTD 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. 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.

GuangDong SongYang Recycle ResourcesLTD's revenue trended up 1.5% each year over three years. That's not a very high growth rate considering it doesn't make profits. In that time the share price is up 26% per year, which is not unreasonable given the revenue growth. Ultimately, the important thing is whether the company is trending to profitability. In this sort of situation it can be worth putting the stock on your watchlist. If it can become profitable, then even moderate revenue growth could grow profits quickly.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling GuangDong SongYang Recycle ResourcesLTD stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Investors in GuangDong SongYang Recycle ResourcesLTD had a tough year, with a total loss of 48%, against a market gain of about 7.2%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. 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. 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 instance, we've identified 2 warning signs for GuangDong SongYang Recycle ResourcesLTD that you should be aware of.

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.