Investors in Hanwang TechnologyLtd (SZSE:002362) from a year ago are still down 21%, even after 17% gain this past week

Hanwang Technology Co.,Ltd (SZSE:002362) shareholders should be happy to see the share price up 27% in the last month. But that is minimal compensation for the share price under-performance over the last year. The cold reality is that the stock has dropped 21% in one year, under-performing the market.

On a more encouraging note the company has added CN¥662m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

See our latest analysis for Hanwang TechnologyLtd

Hanwang TechnologyLtd 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Hanwang TechnologyLtd saw its revenue grow by 8.1%. That's not a very high growth rate considering it doesn't make profits. Given this lacklustre revenue growth, the share price drop of 21% seems pretty appropriate. In a hot market it's easy to forget growth is the life-blood of a loss making company. So remember, if you buy a profitless company then you risk being a profitless investor.

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

Take a more thorough look at Hanwang TechnologyLtd's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market gained around 3.3% in the last year, Hanwang TechnologyLtd shareholders lost 21%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.5% 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. You could get a better understanding of Hanwang TechnologyLtd's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are 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.