Nanjing Red SunLtd (SZSE:000525) climbs 8.0% this week, taking three-year gains to 30%

It hasn't been the best quarter for Nanjing Red Sun Co.,Ltd. (SZSE:000525) shareholders, since the share price has fallen 30% in that time. But over three years, the returns would have left most investors smiling After all, the share price is up a market-beating 30% in that time.

The past week has proven to be lucrative for Nanjing Red SunLtd investors, so let's see if fundamentals drove the company's three-year performance.

Check out our latest analysis for Nanjing Red SunLtd

Because Nanjing Red SunLtd 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. When a company doesn't make profits, we'd generally hope to see good 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.

In the last 3 years Nanjing Red SunLtd saw its revenue shrink by 18% per year. Despite the lack of revenue growth, the stock has returned 9%, compound, over three years. Unless the company is going to make profits soon, we would be pretty cautious about it.

You can see below how earnings and revenue have changed over time (discover 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

Nanjing Red SunLtd provided a TSR of 16% over the year. That's fairly close to the broader market return. That gain looks pretty satisfying, and it is even better than the five-year TSR of 1.4% per year. It is possible that management foresight will bring growth well into the future, even if the share price slows down. It's always interesting to track share price performance over the longer term. But to understand Nanjing Red SunLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Nanjing Red SunLtd you should know about.

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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.