If you want to compound wealth in the stock market, you can do so by buying an index fund. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Shenzhen Increase Technology Co., Ltd. (SZSE:300713) share price is up 81% in the last 1 year, clearly besting the market decline of around 1.5% (not including dividends). That's a solid performance by our standards! The longer term returns have not been as good, with the stock price only 11% higher than it was three years ago.

Since it's been a strong week for Shenzhen Increase Technology shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for Shenzhen Increase Technology

Shenzhen Increase Technology wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

In the last year Shenzhen Increase Technology saw its revenue grow by 14%. We respect that sort of growth, no doubt. Buyers pushed the share price 81% in response, which isn't unreasonable. If the company can maintain the revenue growth, the share price could go higher still. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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

A Different Perspective

It's nice to see that Shenzhen Increase Technology shareholders have received a total shareholder return of 81% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 7% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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 Shenzhen Increase Technology that you should be aware of before investing here.

We will like Shenzhen Increase Technology better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

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