It is a pleasure to report that the Hubei Sanxia New Building Materials Co., Ltd. (SHSE:600293) is up 45% in the last quarter. It's not great that the stock is down over the last three years. But that's not so bad when you consider its market is down 14%.

After losing 13% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Given that Hubei Sanxia New Building Materials only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last three years Hubei Sanxia New Building Materials saw its revenue shrink by 16% per year. That means its revenue trend is very weak compared to other loss making companies. Revenue is dropping off fast, and so too is revenue, which is down 4% per year in that time. That makes us wonder whether the stock may be overvalued, but either way it is worth checking the balance sheet if you're thinking of investing.

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 Hubei Sanxia New Building Materials' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Hubei Sanxia New Building Materials shareholders gained a total return of 8.7% during the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 2% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for Hubei Sanxia New Building Materials that 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.