While not a mind-blowing move, it is good to see that the Anhui Wantong Technology Co.,Ltd. (SZSE:002331) share price has gained 18% in the last three months. But that doesn't change the fact that the returns over the last five years have been less than pleasing. You would have done a lot better buying an index fund, since the stock has dropped 23% in that half decade.
Although the past week has been more reassuring for shareholders, they're still in the red over the last five years, so let's see if the underlying business has been responsible for the decline.
Anhui Wantong TechnologyLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. 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.
Over half a decade Anhui Wantong TechnologyLtd reduced its trailing twelve month revenue by 10.0% for each year. That's definitely a weaker result than most pre-profit companies report. On the face of it we'd posit the share price fall of 4% compound, over five years is well justified by the fundamental deterioration. This loss means the stock shareholders are probably pretty annoyed. Risk averse investors probably wouldn't like this one much.
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 Anhui Wantong TechnologyLtd'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 Anhui Wantong TechnologyLtd shareholders have received a total shareholder return of 9.7% 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 Anhui Wantong TechnologyLtd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Anhui Wantong TechnologyLtd you should be aware of, and 1 of them can't be ignored.
But note: Anhui Wantong TechnologyLtd may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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