Hangzhou Huaxing Chuangye Communication Technology (SZSE:300025) lifts 8.0% this week, taking three-year gains to 149%

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. To wit, the Hangzhou Huaxing Chuangye Communication Technology Co., Ltd. (SZSE:300025) share price has flown 149% in the last three years. Most would be happy with that. Also pleasing for shareholders was the 25% gain in the last three months.

Since the stock has added CN¥371m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Hangzhou Huaxing Chuangye Communication Technology

Because Hangzhou Huaxing Chuangye Communication Technology made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 3 years Hangzhou Huaxing Chuangye Communication Technology saw its revenue shrink by 3.4% per year. So the share price gain of 36% per year is quite surprising. It's fair to say shareholders are definitely counting on a bright future.

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 Hangzhou Huaxing Chuangye Communication Technology's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 9.1% in the twelve months, Hangzhou Huaxing Chuangye Communication Technology shareholders did even worse, losing 20%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 10%, 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. It's always interesting to track share price performance over the longer term. But to understand Hangzhou Huaxing Chuangye Communication Technology better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Hangzhou Huaxing Chuangye Communication Technology (of which 1 shouldn't be ignored!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.