While Guangdong Orient Zirconic Ind Sci & TechLtd (SZSE:002167) shareholders have made 18% in 3 years, increasing losses might now be front of mind as stock sheds 9.3% this week

Guangdong Orient Zirconic Ind Sci & Tech Co.,Ltd (SZSE:002167) shareholders have seen the share price descend 20% over the month. But don't let that distract from the very nice return generated over three years. In the last three years the share price is up, 18%: better than the market.

Although Guangdong Orient Zirconic Ind Sci & TechLtd has shed CN¥519m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for Guangdong Orient Zirconic Ind Sci & TechLtd

Given that Guangdong Orient Zirconic Ind Sci & TechLtd 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. 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.

Over the last three years Guangdong Orient Zirconic Ind Sci & TechLtd has grown its revenue at 11% annually. That's pretty nice growth. The share price gain of 6% per year shows that the market is paying attention to this growth. Of course, valuation is quite sensitive to the rate of growth. Of course, it's always worth considering funding risks when a company isn't profitable.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Although it hurts that Guangdong Orient Zirconic Ind Sci & TechLtd returned a loss of 8.5% in the last twelve months, the broader market was actually worse, returning a loss of 10%. Given the total loss of 3% per year over five years, it seems returns have deteriorated in the last twelve months. While some investors do well specializing in buying companies that are struggling (but nonetheless undervalued), don't forget that Buffett said that 'turnarounds seldom turn'. 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. Take risks, for example - Guangdong Orient Zirconic Ind Sci & TechLtd has 1 warning sign we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.