Sailong Pharmaceutical Group Co.,Ltd. (SZSE:002898) shareholders might be concerned after seeing the share price drop 11% in the last quarter. But don't let that distract from the very nice return generated over three years. After all, the share price is up a market-beating 45% in that time.
Since the stock has added CN¥461m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
Given that Sailong Pharmaceutical GroupLtd 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Sailong Pharmaceutical GroupLtd's revenue trended up 23% each year over three years. That's much better than most loss-making companies. The share price rise of 13% per year throughout that time is nice to see, and given the revenue growth, that gain seems somewhat justified. If that's the case, now might be the time to take a close look at Sailong Pharmaceutical GroupLtd. If the company is trending towards profitability then it could be very interesting.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
We're pleased to report that Sailong Pharmaceutical GroupLtd shareholders have received a total shareholder return of 12% over one year. There's no doubt those recent returns are much better than the TSR loss of 3% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. To that end, you should be aware of the 1 warning sign we've spotted with Sailong Pharmaceutical GroupLtd .
We will like Sailong Pharmaceutical GroupLtd 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.
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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.