When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Xiangxue Pharmaceutical Co.,Ltd. (SZSE:300147) share price has soared 121% return in just a single year. Also pleasing for shareholders was the 92% gain in the last three months. And shareholders have also done well over the long term, with an increase of 95% in the last three years.

The past week has proven to be lucrative for Xiangxue PharmaceuticalLtd investors, so let's see if fundamentals drove the company's one-year performance.

Given that Xiangxue PharmaceuticalLtd 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Xiangxue PharmaceuticalLtd saw its revenue shrink by 3.0%. So we would not have expected the share price to rise 121%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Xiangxue PharmaceuticalLtd'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 Xiangxue PharmaceuticalLtd has rewarded shareholders with a total shareholder return of 121% in the last twelve months. That's better than the annualised return of 9% 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 Xiangxue PharmaceuticalLtd better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Xiangxue PharmaceuticalLtd .

But note: Xiangxue PharmaceuticalLtd 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.