Strong week for Ciwen MediaLtd (SZSE:002343) shareholders doesn't alleviate pain of five-year loss

It's nice to see the Ciwen Media Co.,Ltd. (SZSE:002343) share price up 15% in a week. But if you look at the last five years the returns have not been good. In fact, the share price is down 28%, which falls well short of the return you could get by buying an index fund.

On a more encouraging note the company has added CN¥397m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

See our latest analysis for Ciwen MediaLtd

Given that Ciwen MediaLtd only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last five years Ciwen MediaLtd saw its revenue shrink by 26% per year. That's definitely a weaker result than most pre-profit companies report. On the face of it we'd posit the share price fall of 5% compound, over five years is well justified by the fundamental deterioration. This loss means the stock shareholders are probably pretty annoyed. Risk averse investors probably wouldn't like this one much.

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

We know that Ciwen MediaLtd has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Ciwen MediaLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that Ciwen MediaLtd shareholders are down 27% for the year. Unfortunately, that's worse than the broader market decline of 20%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Ciwen MediaLtd better, we need to consider many other factors. For example, we've discovered 2 warning signs for Ciwen MediaLtd that you should be aware of before investing here.

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.

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