Investors bid WG TECH (Jiang Xi) (SHSE:603773) up CN¥662m despite increasing losses YoY, taking three-year CAGR to 25%

By buying an index fund, investors can approximate the average market return. But if you choose individual stocks with prowess, you can make superior returns. For example, WG TECH (Jiang Xi) Co., Ltd. (SHSE:603773) shareholders have seen the share price rise 94% over three years, well in excess of the market decline (19%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 37%, including dividends.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

View our latest analysis for WG TECH (Jiang Xi)

Given that WG TECH (Jiang Xi) 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.

WG TECH (Jiang Xi)'s revenue trended up 26% each year over three years. That's much better than most loss-making companies. While the compound gain of 25% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. So now might be the perfect time to put WG TECH (Jiang Xi) on your radar. If the company is trending towards profitability then it could be very interesting.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling WG TECH (Jiang Xi) stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that WG TECH (Jiang Xi) shareholders have received a total shareholder return of 37% over the last year. That's including the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand WG TECH (Jiang Xi) better, we need to consider many other factors. For instance, we've identified 2 warning signs for WG TECH (Jiang Xi) (1 is a bit concerning) that you should be aware of.

Of course WG TECH (Jiang Xi) may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.