Further weakness as Huafon Microfibre (Shanghai) (SZSE:300180) drops 12% this week, taking five-year losses to 59%

Generally speaking long term investing is the way to go. But no-one is immune from buying too high. To wit, the Huafon Microfibre (Shanghai) Co., Ltd. (SZSE:300180) share price managed to fall 59% over five long years. That's not a lot of fun for true believers. Even worse, it's down 13% in about a month, which isn't fun at all. But this could be related to poor market conditions -- stocks are down 5.4% in the same time.

With the stock having lost 12% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for Huafon Microfibre (Shanghai)

Because Huafon Microfibre (Shanghai) 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.

Over five years, Huafon Microfibre (Shanghai) grew its revenue at 9.6% per year. That's a pretty good rate for a long time period. The share price return isn't so respectable with an annual loss of 10% over the period. That suggests the market is disappointed with the current growth rate. That could lead to an opportunity if the company is going to become profitable sooner rather than later.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on Huafon Microfibre (Shanghai)'s balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Although it hurts that Huafon Microfibre (Shanghai) returned a loss of 5.0% in the last twelve months, the broader market was actually worse, returning a loss of 12%. What is more upsetting is the 10% per annum loss investors have suffered over the last half decade. This sort of share price action isn't particularly encouraging, but at least the losses are slowing. 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 instance, we've identified 2 warning signs for Huafon Microfibre (Shanghai) that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.