The Chengdu PUTIAN Telecommunications Cable Company Limited (HKG:1202) share price has had a bad week, falling 12%. On the other hand, over the last twelve months the stock has delivered rather impressive returns. We're very pleased to report the share price shot up 215% in that time. So we think most shareholders won't be too upset about the recent fall. The real question is whether the business is trending in the right direction.
Although Chengdu PUTIAN Telecommunications Cable has shed CN¥92m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
Chengdu PUTIAN Telecommunications Cable isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Chengdu PUTIAN Telecommunications Cable actually shrunk its revenue over the last year, with a reduction of 0.8%. So we would not have expected the share price to rise 215%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
If you are thinking of buying or selling Chengdu PUTIAN Telecommunications Cable stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's nice to see that Chengdu PUTIAN Telecommunications Cable shareholders have received a total shareholder return of 215% over the last year. That's better than the annualised return of 1.0% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. To that end, you should learn about the 3 warning signs we've spotted with Chengdu PUTIAN Telecommunications Cable (including 1 which is concerning) .
But note: Chengdu PUTIAN Telecommunications Cable 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.
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.