Hunan Huamin Holdings Co., Ltd. (SZSE:300345) shareholders should be happy to see the share price up 10% in the last week. But that doesn't change the reality of under-performance over the last twelve months. In fact the stock is down 35% in the last year, well below the market return.

The recent uptick of 10% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Hunan Huamin Holdings wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Hunan Huamin Holdings saw its revenue grow by 199%. That's a strong result which is better than most other loss making companies. Given the revenue growth, the share price drop of 35% seems quite harsh. Our sympathies to shareholders who are now underwater. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity.

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 Hunan Huamin Holdings' financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 18% in the twelve months, Hunan Huamin Holdings shareholders did even worse, losing 35%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Hunan Huamin Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for Hunan Huamin Holdings that you should be aware of.

We will like Hunan Huamin Holdings better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.