While it may not be enough for some shareholders, we think it is good to see the Shenzhen Nanshan Power Co., Ltd. (SZSE:000037) share price up 18% in a single quarter. But if you look at the last five years the returns have not been good. In fact, the share price is down 26%, which falls well short of the return you could get by buying an index fund.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Given that Shenzhen Nanshan Power 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. It would be hard to believe in a more profitable future without growing revenues.

In the last five years Shenzhen Nanshan Power saw its revenue shrink by 19% per year. That puts it in an unattractive cohort, to put it mildly. It seems pretty reasonable to us that the share price dipped 5% per year in that time. This loss means the stock shareholders are probably pretty annoyed. Risk averse investors probably wouldn't like this one much.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Shenzhen Nanshan Power stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Shenzhen Nanshan Power has rewarded shareholders with a total shareholder return of 3.8% in the last twelve months. That certainly beats the loss of about 5% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Shenzhen Nanshan Power , and understanding them should be part of your investment process.

Of course Shenzhen Nanshan Power 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com