The last three months have been tough on Ningbo Shenglong Automotive Powertrain System Co.,Ltd. (SHSE:603178) shareholders, who have seen the share price decline a rather worrying 34%. Despite this, the stock is a strong performer over the last year, no doubt about that. During that period, the share price soared a full 146%. So some might not be surprised to see the price retrace some. More important, going forward, is how the business itself is going.

Since the long term performance has been good but there's been a recent pullback of 7.6%, let's check if the fundamentals match the share price.

Given that Ningbo Shenglong Automotive Powertrain SystemLtd only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last year Ningbo Shenglong Automotive Powertrain SystemLtd saw its revenue grow by 3.5%. That's not great considering the company is losing money. So we wouldn't have expected the share price to rise by 146%. We're happy that investors have made money, though we wonder if the increase will be sustained. It's quite likely that the market is considering other factors, not just revenue growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at Ningbo Shenglong Automotive Powertrain SystemLtd's financial health with this free report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Ningbo Shenglong Automotive Powertrain SystemLtd's TSR for the last 1 year was 148%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

It's good to see that Ningbo Shenglong Automotive Powertrain SystemLtd has rewarded shareholders with a total shareholder return of 148% in the last twelve months. That's including the dividend. That's better than the annualised return of 19% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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 example, we've discovered 2 warning signs for Ningbo Shenglong Automotive Powertrain SystemLtd that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.