Jilin Liyuan Precision Manufacturing (SZSE:002501) delivers shareholders decent 54% return over 1 year, surging 8.2% in the last week alone

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the Jilin Liyuan Precision Manufacturing Co., Ltd. (SZSE:002501) share price is 54% higher than it was a year ago, much better than the market return of around 17% (not including dividends) in the same period. So that should have shareholders smiling. However, the stock hasn't done so well in the longer term, with the stock only up 8.8% in three years.

The past week has proven to be lucrative for Jilin Liyuan Precision Manufacturing investors, so let's see if fundamentals drove the company's one-year performance.

Check out our latest analysis for Jilin Liyuan Precision Manufacturing

Because Jilin Liyuan Precision Manufacturing 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Jilin Liyuan Precision Manufacturing actually shrunk its revenue over the last year, with a reduction of 38%. Despite the lack of revenue growth, the stock has returned a solid 54% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

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

Take a more thorough look at Jilin Liyuan Precision Manufacturing's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Jilin Liyuan Precision Manufacturing has rewarded shareholders with a total shareholder return of 54% in the last twelve months. Notably the five-year annualised TSR loss of 0.5% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Jilin Liyuan Precision Manufacturing better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Jilin Liyuan Precision Manufacturing you should be aware of, and 1 of them is significant.

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.