By buying an index fund, you can roughly match the market return with ease. But if you choose individual stocks with prowess, you can make superior returns. Just take a look at Anhui Tatfook Technology Co., Ltd (SZSE:300134), which is up 32%, over three years, soundly beating the market decline of 18% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 13% in the last year.

Since it's been a strong week for Anhui Tatfook Technology shareholders, let's have a look at trend of the longer term fundamentals.

Anhui Tatfook Technology 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. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years Anhui Tatfook Technology has grown its revenue at 2.5% annually. Considering the company is losing money, we think that rate of revenue growth is uninspiring. The modest growth is probably broadly reflected in the share price, which is up 10%, per year over 3 years. The real question is when the business will generate profits, and how quickly they will grow. In this sort of situation it can be worth putting the stock on your watchlist. If it can become profitable, then even moderate revenue growth could grow profits quickly.

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

This free interactive report on Anhui Tatfook Technology's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Anhui Tatfook Technology has rewarded shareholders with a total shareholder return of 13% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 6% per year over five years. 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 Anhui Tatfook Technology better, we need to consider many other factors. For instance, we've identified 1 warning sign for Anhui Tatfook Technology that you should be aware of.

But note: Anhui Tatfook Technology may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.