Beijing Aosaikang Pharmaceutical (SZSE:002755 shareholders incur further losses as stock declines 4.4% this week, taking three-year losses to 28%

You can invest in an index fund if you want to make sure your returns approximately match the overall market. By comparison, an individual stock is unlikely to match market returns - and could well fall short. Unfortunately for investors in Beijing Aosaikang Pharmaceutical Co., Ltd. (SZSE:002755), the share price has slipped 28% in three years, falling short of the marketdecline of 27%.

If the past week is anything to go by, investor sentiment for Beijing Aosaikang Pharmaceutical isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Beijing Aosaikang Pharmaceutical

Given that Beijing Aosaikang Pharmaceutical didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. 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.

In the last three years Beijing Aosaikang Pharmaceutical saw its revenue shrink by 39% per year. That's definitely a weaker result than most pre-profit companies report. With revenue in decline, the share price decline of 9% per year is hardly undeserved. It would probably be worth asking whether the company can fund itself to profitability. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We're pleased to report that Beijing Aosaikang Pharmaceutical shareholders have received a total shareholder return of 9.1% over one year. Notably the five-year annualised TSR loss of 4% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Beijing Aosaikang Pharmaceutical is showing 1 warning sign in our investment analysis , you should know about...

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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