If You Had Bought China Youzan (HKG:8083) Stock Three Years Ago, You Could Pocket A 350% Gain Today

Investing can be hard but the potential fo an individual stock to pay off big time inspires us. Not every pick can be a winner, but when you pick the right stock, you can win big. One bright shining star stock has been China Youzan Limited (HKG:8083), which is 350% higher than three years ago. It's also good to see the share price up 18% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

See our latest analysis for China Youzan

Given that China Youzan 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 expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

China Youzan's revenue trended up 68% each year over three years. That's well above most pre-profit companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 65% per year, over the same period. It's always tempting to take profits after a share price gain like that, but high-growth companies like China Youzan can sometimes sustain strong growth for many years. So we'd recommend you take a closer look at this one, or even put it on your watchlist.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

If you are thinking of buying or selling China Youzan stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that China Youzan has rewarded shareholders with a total shareholder return of 253% in the last twelve months. That gain is better than the annual TSR over five years, which is 31%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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 3 warning signs for China Youzan you should be aware of.

But note: China Youzan may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

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This article by Simply Wall St is general in nature. 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.
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