Pulling back 3.1% this week, Cetc Potevio Science&TechnologyLtd's SZSE:002544) three-year decline in earnings may be coming into investors focus

It hasn't been the best quarter for Cetc Potevio Science&Technology Co.,Ltd. (SZSE:002544) shareholders, since the share price has fallen 21% in that time. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 29% during that period.

Although Cetc Potevio Science&TechnologyLtd has shed CN¥361m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for Cetc Potevio Science&TechnologyLtd

We don't think that Cetc Potevio Science&TechnologyLtd's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last 3 years Cetc Potevio Science&TechnologyLtd saw its revenue shrink by 3.5% per year. Despite the lack of revenue growth, the stock has returned 9%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.

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

This free interactive report on Cetc Potevio Science&TechnologyLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

The total return of 16% received by Cetc Potevio Science&TechnologyLtd shareholders over the last year isn't far from the market return of -16%. The silver lining is that longer term investors would have made a total return of 5% per year over half a decade. If the stock price has been impacted by changing sentiment, rather than deteriorating business conditions, it could spell opportunity. It's always interesting to track share price performance over the longer term. But to understand Cetc Potevio Science&TechnologyLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Cetc Potevio Science&TechnologyLtd , and understanding them should be part of your investment process.

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.