Huadian Liaoning Energy DevelopmentLtd (SHSE:600396) pulls back 12% this week, but still delivers shareholders decent 7.8% CAGR over 5 years

Huadian Liaoning Energy Development Co.,Ltd (SHSE:600396) shareholders might be concerned after seeing the share price drop 12% in the last week. Looking further back, the stock has generated good profits over five years. Its return of 46% has certainly bested the market return!

Since the long term performance has been good but there's been a recent pullback of 12%, let's check if the fundamentals match the share price.

Check out our latest analysis for Huadian Liaoning Energy DevelopmentLtd

Huadian Liaoning Energy DevelopmentLtd 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 5 years Huadian Liaoning Energy DevelopmentLtd saw its revenue shrink by 5.6% per year. Even though revenue hasn't increased, the stock actually gained 8%, per year, during the same period. It's probably worth checking other factors such as the profitability, to try to understand the share price action. It may not be reflecting the revenue.

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

This free interactive report on Huadian Liaoning Energy DevelopmentLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Huadian Liaoning Energy DevelopmentLtd shareholders gained a total return of 8.4% during the year. Unfortunately this falls short of the market return. The silver lining is that the gain was actually better than the average annual return of 8% per year over five year. It is possible that returns will improve along with the business fundamentals. You could get a better understanding of Huadian Liaoning Energy DevelopmentLtd's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

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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.