It hasn't been the best quarter for Bengang Steel Plates Co., Ltd. (SZSE:000761) shareholders, since the share price has fallen 14% in that time. But that shouldn't obscure the pleasing returns achieved by shareholders over the last three years. In the last three years the share price is up, 14%: better than the market.
After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.
Given that Bengang Steel Plates 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last three years Bengang Steel Plates has grown its revenue at 3.7% annually. That's not a very high growth rate considering it doesn't make profits. In that time the share price is up 4% per year, which is not unreasonable given the revenue growth. The real question is when the business will generate profits, and how quickly they will grow. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.
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.
What About The Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Bengang Steel Plates' total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Bengang Steel Plates' TSR of 42% for the 3 years exceeded its share price return, because it has paid dividends.
A Different Perspective
It's nice to see that Bengang Steel Plates shareholders have received a total shareholder return of 4.2% over the last year. That gain is better than the annual TSR over five years, which is 4%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Bengang Steel Plates you should know about.
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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.