Shareholders in Shenzhen Sunrise New Energy (SZSE:002256) have lost 29%, as stock drops 14% this past week

It is a pleasure to report that the Shenzhen Sunrise New Energy Co., Ltd. (SZSE:002256) is up 58% in the last quarter. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 29% in the last three years, significantly under-performing the market.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

See our latest analysis for Shenzhen Sunrise New Energy

Because Shenzhen Sunrise New Energy 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. 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.

In the last three years Shenzhen Sunrise New Energy saw its revenue shrink by 1.6% per year. That is not a good result. The annual decline of 9% per year in that period has clearly disappointed holders. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

Shenzhen Sunrise New Energy shareholders gained a total return of 6.3% during the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 1.4% per year over five year. This suggests the company might be improving over time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Shenzhen Sunrise New Energy (1 shouldn't be ignored!) that you should be aware of before investing here.

But note: Shenzhen Sunrise New Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.