The 7.9% return this week takes Hainan Haiqi Transportation GroupLtd's (SHSE:603069) shareholders five-year gains to 149%

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. For instance, the price of Hainan Haiqi Transportation Group Co.,Ltd. (SHSE:603069) stock is up an impressive 149% over the last five years. It's even up 7.9% in the last week.

The past week has proven to be lucrative for Hainan Haiqi Transportation GroupLtd investors, so let's see if fundamentals drove the company's five-year performance.

See our latest analysis for Hainan Haiqi Transportation GroupLtd

Because Hainan Haiqi Transportation GroupLtd 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years Hainan Haiqi Transportation GroupLtd saw its revenue shrink by 5.5% per year. On the other hand, the share price done the opposite, gaining 20%, compound, each year. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, this situation makes us a little wary of the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

While it's certainly disappointing to see that Hainan Haiqi Transportation GroupLtd shares lost 13% throughout the year, that wasn't as bad as the market loss of 17%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 20% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hainan Haiqi Transportation GroupLtd , and understanding them should be part of your investment process.

We will like Hainan Haiqi Transportation GroupLtd better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider 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.

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