The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. To wit, the Shenzhen InfoGem Technologies Co., Ltd. (SZSE:300085) share price has flown 279% in the last three years. How nice for those who held the stock! Shareholders are also celebrating an even better 562% rise, over the last three months.

Since the stock has added CN¥5.5b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Given that Shenzhen InfoGem Technologies 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. When a company doesn't make profits, we'd generally hope to see good 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 3 years Shenzhen InfoGem Technologies saw its revenue shrink by 9.5% per year. So the share price gain of 56% per year is quite surprising. It's a good reminder that expectations about the future, not the past history, always impact share prices.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Shenzhen InfoGem Technologies' earnings, revenue and cash flow.

A Different Perspective

It's good to see that Shenzhen InfoGem Technologies has rewarded shareholders with a total shareholder return of 252% in the last twelve months. That's better than the annualised return of 30% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Shenzhen InfoGem Technologies better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Shenzhen InfoGem Technologies you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.