Anhui Sinonet & Xinlong Science & Technology Co., Ltd. (SZSE:002298) shareholders will doubtless be very grateful to see the share price up 61% in the last quarter. But that doesn't help the fact that the three year return is less impressive. Truth be told the share price declined 23% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

With the stock having lost 10.0% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Given that Anhui Sinonet & Xinlong Science & Technology 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years, Anhui Sinonet & Xinlong Science & Technology's revenue dropped 14% per year. That is not a good result. The annual decline of 7% per year in that period has clearly disappointed holders. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

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

Anhui Sinonet & Xinlong Science & Technology shareholders gained a total return of 3.1% during the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 3% per year, over five years. It could well be that the business is stabilizing. 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 1 warning sign for Anhui Sinonet & Xinlong Science & Technology that you should be aware of before investing here.

Of course Anhui Sinonet & Xinlong Science & Technology 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 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.