The 9.9% return this week takes Jiangsu Kuangshun Photosensitivity New-Material Stock's (SZSE:300537) shareholders three-year gains to 36%

By buying an index fund, investors can approximate the average market return. But if you pick the right individual stocks, you could make more than that. For example, Jiangsu Kuangshun Photosensitivity New-Material Stock Co., Ltd. (SZSE:300537) shareholders have seen the share price rise 36% over three years, well in excess of the market decline (18%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 18% in the last year.

Since the stock has added CN¥393m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for Jiangsu Kuangshun Photosensitivity New-Material Stock

Given that Jiangsu Kuangshun Photosensitivity New-Material Stock only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Jiangsu Kuangshun Photosensitivity New-Material Stock actually saw its revenue drop by 10% per year over three years. The revenue growth might be lacking but the share price has gained 11% each year in that time. Unless the company is going to make profits soon, we would be pretty cautious about it.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

It is of course excellent to see how Jiangsu Kuangshun Photosensitivity New-Material Stock has grown profits over the years, but the future is more important for shareholders. This free interactive report on Jiangsu Kuangshun Photosensitivity New-Material Stock's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Jiangsu Kuangshun Photosensitivity New-Material Stock shareholders have received a total shareholder return of 18% over the last year. That's better than the annualised return of 3% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. To that end, you should learn about the 3 warning signs we've spotted with Jiangsu Kuangshun Photosensitivity New-Material Stock (including 1 which is potentially serious) .

Of course Jiangsu Kuangshun Photosensitivity New-Material Stock may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.