Dagang Holding Group Co.,Ltd. (SZSE:300103) shareholders will doubtless be very grateful to see the share price up 63% in the last quarter. But that doesn't help the fact that the three year return is less impressive. Truth be told the share price declined 27% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Given that Dagang Holding 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. 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.

In the last three years Dagang Holding GroupLtd saw its revenue shrink by 57% per year. That means its revenue trend is very weak compared to other loss making companies. On the face of it we'd posit the share price fall of 8% compound, over three years is well justified by the fundamental deterioration. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Dagang Holding GroupLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Dagang Holding GroupLtd shareholders have received returns of 8.6% over twelve months, which isn't far from the general market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 4%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for Dagang Holding GroupLtd. It's always interesting to track share price performance over the longer term. But to understand Dagang Holding GroupLtd better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Dagang Holding GroupLtd (of which 1 is concerning!) you should know about.

Of course Dagang Holding GroupLtd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.