It can certainly be frustrating when a stock does not perform as hoped. But no-one can make money on every call, especially in a declining market. The Changzhou Tronly New Electronic Materials Co., Ltd. (SZSE:300429) is down 25% over three years, but the total shareholder return is -25% once you include the dividend. And that total return actually beats the market decline of 31%. More recently, the share price has dropped a further 16% in a month.

With the stock having lost 9.0% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Changzhou Tronly New Electronic Materials isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope 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.

In the last three years Changzhou Tronly New Electronic Materials saw its revenue shrink by 6.9% per year. That is not a good result. The yearly loss of 8% over three years isn't too bad in the scheme of things. The weak broader market would have contributed to the lack of optimism. We'd need to get more comfortable that the company will trend towards profitability, before getting considering a purchase.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's good to see that Changzhou Tronly New Electronic Materials has rewarded shareholders with a total shareholder return of 12% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 4% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. 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. For instance, we've identified 3 warning signs for Changzhou Tronly New Electronic Materials that you should be aware of.

For those who like to find winning investments this free list of undervalued 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.

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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.