Hangzhou Huaxing Chuangye Communication Technology Co., Ltd. (SZSE:300025) shareholders have seen the share price descend 24% over the month. But in three years the returns have been great. Indeed, the share price is up a very strong 123% in that time. So the recent fall in the share price should be viewed in that context. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.

While this past week has detracted from the company's three-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

Check out our latest analysis for Hangzhou Huaxing Chuangye Communication Technology

Because Hangzhou Huaxing Chuangye Communication Technology 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 3 years Hangzhou Huaxing Chuangye Communication Technology saw its revenue shrink by 5.8% per year. So we wouldn't have expected the share price to gain 31% per year, but it has. It's fair to say shareholders are definitely counting on a bright future.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Hangzhou Huaxing Chuangye Communication Technology's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Hangzhou Huaxing Chuangye Communication Technology shareholders have received a total shareholder return of 33% over the last year. That gain is better than the annual TSR over five years, which is 10%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. You could get a better understanding of Hangzhou Huaxing Chuangye Communication Technology's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.