Optimism for ShenzhenJingQuanHua ElectronicsLtd (SZSE:002885) has grown this past week, despite one-year decline in earnings

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the ShenzhenJingQuanHua Electronics Co.,Ltd. (SZSE:002885) share price is up 27% in the last 1 year, clearly besting the market return of around 19% (not including dividends). That's a solid performance by our standards! Zooming out, the stock is actually down 1.1% in the last three years.

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.

Check out our latest analysis for ShenzhenJingQuanHua ElectronicsLtd

While ShenzhenJingQuanHua ElectronicsLtd made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

ShenzhenJingQuanHua ElectronicsLtd actually shrunk its revenue over the last year, with a reduction of 3.3%. Despite the lack of revenue growth, the stock has returned a solid 27% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

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. It might be well worthwhile taking a look at our free report on ShenzhenJingQuanHua ElectronicsLtd's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that ShenzhenJingQuanHua ElectronicsLtd shareholders have received a total shareholder return of 27% over one year. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 1.7% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand ShenzhenJingQuanHua ElectronicsLtd better, we need to consider many other factors. Even so, be aware that ShenzhenJingQuanHua ElectronicsLtd is showing 2 warning signs in our investment analysis , you should know about...

Of course ShenzhenJingQuanHua ElectronicsLtd 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.

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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.