Despite shrinking by CN¥485m in the past week, Xinjiang Bai Hua Cun Pharma TechLtd (SHSE:600721) shareholders are still up 41% over 3 years

Some Xinjiang Bai Hua Cun Pharma Tech Co.,Ltd (SHSE:600721) shareholders are probably rather concerned to see the share price fall 31% over the last three months. But that doesn't change the fact that the returns over the last three years have been pleasing. After all, the share price is up a market-beating 41% in that time.

While the stock has fallen 21% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

See our latest analysis for Xinjiang Bai Hua Cun Pharma TechLtd

Xinjiang Bai Hua Cun Pharma TechLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Xinjiang Bai Hua Cun Pharma TechLtd's revenue trended up 43% each year over three years. That's much better than most loss-making companies. While the compound gain of 12% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. So now might be the perfect time to put Xinjiang Bai Hua Cun Pharma TechLtd on your radar. If the company is trending towards profitability then it could be very interesting.

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

This free interactive report on Xinjiang Bai Hua Cun Pharma TechLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 17% in the twelve months, Xinjiang Bai Hua Cun Pharma TechLtd shareholders did even worse, losing 24%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 5% over the last half decade. 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. You could get a better understanding of Xinjiang Bai Hua Cun Pharma TechLtd's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.