Ji Yao Holding Group (SZSE:300108 shareholders incur further losses as stock declines 12% this week, taking five-year losses to 61%

This month, we saw the Ji Yao Holding Group Co., Ltd. (SZSE:300108) up an impressive 43%. But don't envy holders -- looking back over 5 years the returns have been really bad. In fact, the share price has declined rather badly, down some 61% in that time. So we're hesitant to put much weight behind the short term increase. We'd err towards caution given the long term under-performance.

Since Ji Yao Holding Group has shed CN¥173m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Ji Yao Holding Group

Because Ji Yao Holding Group made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade Ji Yao Holding Group reduced its trailing twelve month revenue by 24% for each year. That's definitely a weaker result than most pre-profit companies report. It seems appropriate, then, that the share price slid about 10% annually during that time. We don't generally like to own companies that lose money and don't grow revenues. You might be better off spending your money on a leisure activity. This looks like a really risky stock to buy, at a glance.

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

If you are thinking of buying or selling Ji Yao Holding Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 16% in the twelve months, Ji Yao Holding Group shareholders did even worse, losing 29%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10% 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. It's always interesting to track share price performance over the longer term. But to understand Ji Yao Holding Group better, we need to consider many other factors. For instance, we've identified 3 warning signs for Ji Yao Holding Group that you should be aware of.

We will like Ji Yao Holding Group better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.