It is a pleasure to report that the Shanghai Tianyong Engineering Co., Ltd. (SHSE:603895) is up 39% in the last quarter. But in truth the last year hasn't been good for the share price. In fact the stock is down 10% in the last year, well below the market return.

On a more encouraging note the company has added CN¥442m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

Given that Shanghai Tianyong Engineering didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Shanghai Tianyong Engineering's revenue didn't grow at all in the last year. In fact, it fell 25%. That's not what investors generally want to see. The stock price has languished lately, falling 10% in a year. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.

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

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

A Different Perspective

Investors in Shanghai Tianyong Engineering had a tough year, with a total loss of 10%, against a market gain of about 8.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 0.5% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Shanghai Tianyong Engineering better, we need to consider many other factors. For example, we've discovered 1 warning sign for Shanghai Tianyong Engineering that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.