Jiangsu Zongyi Co.,LTD (SHSE:600770) shareholders should be happy to see the share price up 20% in the last month. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 57% in the last three years. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

The recent uptick of 13% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Because Jiangsu ZongyiLTD 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over the last three years, Jiangsu ZongyiLTD's revenue dropped 6.0% per year. That is not a good result. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 16% per year. Having said that, if growth is coming in the future, now may be the low ebb for the company. We don't generally like to own companies that lose money and can't grow revenues. But any company is worth looking at when it makes a maiden profit.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

While the broader market lost about 19% in the twelve months, Jiangsu ZongyiLTD shareholders did even worse, losing 47%. 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 9% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. For example, we've discovered 2 warning signs for Jiangsu ZongyiLTD (1 is potentially serious!) that you should be aware of before investing here.

We will like Jiangsu ZongyiLTD better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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.