It is doubtless a positive to see that the Xiangxue Pharmaceutical Co.,Ltd. (SZSE:300147) share price has gained some 38% in the last three months. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 37% in the last three years, falling well short of the market return.

While the stock has risen 26% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Because Xiangxue PharmaceuticalLtd made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last three years Xiangxue PharmaceuticalLtd saw its revenue shrink by 12% per year. That's not what investors generally want to see. The annual decline of 11% per year in that period has clearly disappointed holders. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Xiangxue PharmaceuticalLtd's financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that Xiangxue PharmaceuticalLtd shareholders are down 15% for the year. Unfortunately, that's worse than the broader market decline of 8.9%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Xiangxue PharmaceuticalLtd better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Xiangxue PharmaceuticalLtd (of which 1 is a bit unpleasant!) you should know about.

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.