Shenzhen Cotran New Material Co.,Ltd. (SZSE:300731) shareholders will doubtless be very grateful to see the share price up 58% in the last month. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 28% in the last three years, significantly under-performing the market.

On a more encouraging note the company has added CN¥583m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

While Shenzhen Cotran New MaterialLtd made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over three years, Shenzhen Cotran New MaterialLtd grew revenue at 13% per year. That's a pretty good rate of top-line growth. Shareholders have endured a share price decline of 9% per year. So the market has definitely lost some love for the stock. With revenue growing at a solid clip, now might be the time to focus on the possibility that it will have a brighter future.

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

We know that Shenzhen Cotran New MaterialLtd has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Shenzhen Cotran New MaterialLtd stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

We're pleased to report that Shenzhen Cotran New MaterialLtd shareholders have received a total shareholder return of 1.7% over one year. That certainly beats the loss of about 3% per year over the last half decade. 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 Shenzhen Cotran New MaterialLtd 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 Shenzhen Cotran New MaterialLtd (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.