Xiangyang Automobile Bearing Co., Ltd. (SZSE:000678) shareholders should be happy to see the share price up 23% in the last week. But if you look at the last five years the returns have not been good. In fact, the share price is down 25%, which falls well short of the return you could get by buying an index fund.

On a more encouraging note the company has added CN¥469m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

Xiangyang Automobile Bearing 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over half a decade Xiangyang Automobile Bearing reduced its trailing twelve month revenue by 2.9% for each year. While far from catastrophic that is not good. The stock hasn't done well for shareholders in the last five years, falling 5%, annualized. But it doesn't surprise given the falling revenue. It might be worth watching for signs of a turnaround - buyers are probably expecting one.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Xiangyang Automobile Bearing's earnings, revenue and cash flow.

A Different Perspective

Xiangyang Automobile Bearing shareholders are down 16% over twelve months, which isn't far from the market return of -17%. Unfortunately, last year's performance is a deterioration of an already poor long term track record, given the loss of 5% per year over the last five years. It will probably take a substantial improvement in the fundamental performance for the company to reverse this trend. It's always interesting to track share price performance over the longer term. But to understand Xiangyang Automobile Bearing better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Xiangyang Automobile Bearing (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.