Jiangxi Hengda Hi-TechLtd (SZSE:002591 investor five-year losses grow to 32% as the stock sheds CN¥201m this past week

Ideally, your overall portfolio should beat the market average. But even the best stock picker will only win with some selections. So we wouldn't blame long term Jiangxi Hengda Hi-Tech Co.,Ltd. (SZSE:002591) shareholders for doubting their decision to hold, with the stock down 32% over a half decade. The last week also saw the share price slip down another 12%.

After losing 12% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

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Given that Jiangxi Hengda Hi-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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 five years, Jiangxi Hengda Hi-TechLtd grew its revenue at 1.6% per year. That's not a very high growth rate considering it doesn't make profits. Given the weak growth, the share price fall of 6% isn't particularly surprising. Investors should consider how bad the losses are, and whether the company can make it to profitability with ease. It could be worth putting it on your watchlist and revisiting when it makes its maiden profit.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Jiangxi Hengda Hi-TechLtd's earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 16% in the last year, Jiangxi Hengda Hi-TechLtd shareholders lost 5.3%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, longer term shareholders are suffering worse, given the loss of 6% doled out over the last five years. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

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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.