Staidson (Beijing) BioPharmaceuticals (SZSE:300204 investor three-year losses grow to 56% as the stock sheds CN¥397m this past week

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Staidson (Beijing) BioPharmaceuticals Co., Ltd. (SZSE:300204) shareholders have had a particularly rough ride in the last three year. Regrettably, they have had to cope with a 56% drop in the share price over that period. And over the last year the share price fell 29%, so we doubt many shareholders are delighted. Unfortunately the share price momentum is still quite negative, with prices down 16% in thirty days.

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

See our latest analysis for Staidson (Beijing) BioPharmaceuticals

Because Staidson (Beijing) BioPharmaceuticals 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last three years Staidson (Beijing) BioPharmaceuticals saw its revenue shrink by 18% per year. That means its revenue trend is very weak compared to other loss making companies. Arguably, the market has responded appropriately to this business performance by sending the share price down 16% (annualized) in the same time period. When revenue is dropping, and losses are still costing, and the share price sinking fast, it's fair to ask if something is remiss. It could be a while before the company repays long suffering shareholders with share price gains.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

While the broader market gained around 9.3% in the last year, Staidson (Beijing) BioPharmaceuticals shareholders lost 29%. 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 6% 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. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Staidson (Beijing) BioPharmaceuticals you should know about.

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.