Despite currently being unprofitable, Guangxi Radio and Television Information Network (SHSE:600936) has delivered a 20% return to shareholders over 3 years

By buying an index fund, you can roughly match the market return with ease. But if you choose individual stocks with prowess, you can make superior returns. For example, the Guangxi Radio and Television Information Network Corporation Limited (SHSE:600936) share price is up 20% in the last three years, clearly besting the market decline of around 18% (not including dividends).

Since the long term performance has been good but there's been a recent pullback of 7.5%, let's check if the fundamentals match the share price.

Check out our latest analysis for Guangxi Radio and Television Information Network

Guangxi Radio and Television Information Network wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Guangxi Radio and Television Information Network actually saw its revenue drop by 17% per year over three years. Despite the lack of revenue growth, the stock has returned 6%, compound, over three years. Unless the company is going to make profits soon, we would be pretty cautious about it.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized 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. Dive deeper into the earnings by checking this interactive graph of Guangxi Radio and Television Information Network's earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 6.2% in the last year, Guangxi Radio and Television Information Network shareholders lost 20%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.8% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Guangxi Radio and Television Information Network better, we need to consider many other factors. Take risks, for example - Guangxi Radio and Television Information Network has 2 warning signs we think you should be aware of.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.