The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example Shenwan Hongyuan (H.K.) Limited (HKG:218). Its share price is already up an impressive 124% in the last twelve months. Better yet, the share price has risen 168% in the last week. In contrast, the longer term returns are negative, since the share price is 18% lower than it was three years ago.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Because Shenwan Hongyuan (H.K.) 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. 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.

Shenwan Hongyuan (H.K.) grew its revenue by 34% last year. That's a fairly respectable growth rate. While that revenue growth is pretty good the share price performance outshone it, with a lift of 124% as mentioned above. Given that the business has made good progress on the top line, it would be worth taking a look at its path to profitability. Of course, we are always cautious about succumbing to 'fear of missing out' when a stock has shot up strongly.

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

This free interactive report on Shenwan Hongyuan (H.K.)'s balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Shenwan Hongyuan (H.K.) shareholders have received a total shareholder return of 124% over one year. Notably the five-year annualised TSR loss of 4% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Shenwan Hongyuan (H.K.) better, we need to consider many other factors. Take risks, for example - Shenwan Hongyuan (H.K.) has 2 warning signs we think you should be aware of.

Of course Shenwan Hongyuan (H.K.) may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong 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.