Strong week for Henan Yuneng HoldingsLtd (SZSE:001896) shareholders doesn't alleviate pain of three-year loss

Henan Yuneng Holdings Co.,Ltd. (SZSE:001896) shareholders will doubtless be very grateful to see the share price up 35% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. Truth be told the share price declined 42% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

On a more encouraging note the company has added CN¥442m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

See our latest analysis for Henan Yuneng HoldingsLtd

Given that Henan Yuneng HoldingsLtd didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last three years, Henan Yuneng HoldingsLtd saw its revenue grow by 4.5% per year, compound. That's not a very high growth rate considering it doesn't make profits. Indeed, the stock dropped 12% over the last three years. If revenue growth accelerates, we might see the share price bounce. But ultimately the key will be whether the company can become profitability.

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 never nice to take a loss, Henan Yuneng HoldingsLtd shareholders can take comfort that their trailing twelve month loss of 3.0% wasn't as bad as the market loss of around 9.1%. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. 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. Case in point: We've spotted 2 warning signs for Henan Yuneng HoldingsLtd you should be aware of, and 1 of them is concerning.

Of course Henan Yuneng HoldingsLtd 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.

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

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.