Jolywood (Suzhou) SunwattLtd (SZSE:300393) adds CN¥370m to market cap in the past 7 days, though investors from three years ago are still down 55%

It is a pleasure to report that the Jolywood (Suzhou) Sunwatt Co.,Ltd. (SZSE:300393) is up 37% in the last quarter. But that doesn't change the fact that the returns over the last three years have been disappointing. In that time, the share price dropped 57%. So the improvement may be a real relief to some. The rise has some hopeful, but turnarounds are often precarious.

While the stock has risen 4.7% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

See our latest analysis for Jolywood (Suzhou) SunwattLtd

Jolywood (Suzhou) SunwattLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 three years, Jolywood (Suzhou) SunwattLtd grew revenue at 15% per year. That's a fairly respectable growth rate. So some shareholders would be frustrated with the compound loss of 16% per year. The market must have had really high expectations to be disappointed with this progress. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

Jolywood (Suzhou) SunwattLtd shareholders are down 26% for the year (even including dividends), but the market itself is up 7.8%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 7%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. For instance, we've identified 3 warning signs for Jolywood (Suzhou) SunwattLtd that you should be aware of.

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.