Tonghua Golden-Horse Pharmaceutical Industry Co,Ltd (SZSE:000766) shareholders have seen the share price descend 12% over the month. But that doesn't undermine the rather lovely longer-term return, if you measure over the last three years. In fact, the share price is up a full 257% compared to three years ago. It's not uncommon to see a share price retrace a bit, after a big gain. If the business can perform well for years to come, then the recent drop could be an opportunity.

Since it's been a strong week for Tonghua Golden-Horse Pharmaceutical Industry CoLtd shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Tonghua Golden-Horse Pharmaceutical Industry CoLtd

Given that Tonghua Golden-Horse Pharmaceutical Industry CoLtd 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 3 years Tonghua Golden-Horse Pharmaceutical Industry CoLtd saw its revenue grow at 5.0% per year. That's not a very high growth rate considering it doesn't make profits. In comparison, the share price rise of 53% per year over the last three years is pretty impressive. We'd need to take a closer look at the revenue and profit trends to see whether the improvements might justify that sort of increase. It seems likely that the market is pretty optimistic about Tonghua Golden-Horse Pharmaceutical Industry CoLtd, given it is losing money.

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

It's nice to see that Tonghua Golden-Horse Pharmaceutical Industry CoLtd shareholders have received a total shareholder return of 136% over the last year. That's better than the annualised return of 10% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 risks, for instance. Every company has them, and we've spotted 2 warning signs for Tonghua Golden-Horse Pharmaceutical Industry CoLtd you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.