Beijing Dalong Weiye Real Estate DevelopmentLtd (SHSE:600159) dips 12% this week as increasing losses might not be inspiring confidence among its investors

While not a mind-blowing move, it is good to see that the Beijing Dalong Weiye Real Estate Development Co.,Ltd (SHSE:600159) share price has gained 16% in the last three months. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 38% in one year, under-performing the market.

If the past week is anything to go by, investor sentiment for Beijing Dalong Weiye Real Estate DevelopmentLtd 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 Dalong Weiye Real Estate DevelopmentLtd

Beijing Dalong Weiye Real Estate DevelopmentLtd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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 just one year Beijing Dalong Weiye Real Estate DevelopmentLtd saw its revenue fall by 7.6%. That looks pretty grim, at a glance. The stock price has languished lately, falling 38% in a year. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Beijing Dalong Weiye Real Estate DevelopmentLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Investors in Beijing Dalong Weiye Real Estate DevelopmentLtd had a tough year, with a total loss of 38%, against a market gain of about 14%. 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. On the bright side, long term shareholders have made money, with a gain of 3% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Beijing Dalong Weiye Real Estate DevelopmentLtd has 1 warning sign we think you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.