Kunming Longjin Pharmaceutical Co., Ltd. (SZSE:002750) shareholders should be happy to see the share price up 21% in the last week. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 48% in a year, falling short of the returns you could get by investing in an index fund.

Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.

Because Kunming Longjin Pharmaceutical 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Kunming Longjin Pharmaceutical's revenue didn't grow at all in the last year. In fact, it fell 57%. If you think that's a particularly bad result, you're statistically on the money Meanwhile, the share price dropped by 48%. We would want to see improvements in the core business, and diminishing losses, before getting too excited about this one.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Kunming Longjin Pharmaceutical's financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that Kunming Longjin Pharmaceutical shareholders are down 48% for the year. Unfortunately, that's worse than the broader market decline of 21%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.4% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Kunming Longjin Pharmaceutical better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Kunming Longjin Pharmaceutical , and understanding them should be part of your investment process.

But note: Kunming Longjin Pharmaceutical 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 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.