This month, we saw the Shenzhen Overseas Chinese Town Co.,Ltd. (SZSE:000069) up an impressive 40%. But that doesn't change the fact that the returns over the last half decade have been disappointing. In that time the share price has delivered a rude shock to holders, who find themselves down 63% after a long stretch. Some might say the recent bounce is to be expected after such a bad drop. Of course, this could be the start of a turnaround.

After losing 17% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Shenzhen Overseas Chinese TownLtd 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. 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.

In the last half decade, Shenzhen Overseas Chinese TownLtd saw its revenue increase by 3.1% per year. That's not a very high growth rate considering it doesn't make profits. It's likely this weak growth has contributed to an annualised return of 10% for the last five years. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in Shenzhen Overseas Chinese TownLtd. However, it's possible too many in the market will ignore it, and there may be an opportunity if it starts to recover down the track.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling Shenzhen Overseas Chinese TownLtd stock, you should check out this FREE detailed report on its balance sheet.

What About The Total Shareholder Return (TSR)?

We've already covered Shenzhen Overseas Chinese TownLtd's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Shenzhen Overseas Chinese TownLtd's TSR of was a loss of 58% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

Shenzhen Overseas Chinese TownLtd shareholders are down 32% for the year, but the market itself is up 0.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10% over the last half decade. 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. Case in point: We've spotted 1 warning sign for Shenzhen Overseas Chinese TownLtd you should be aware of.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.