It's been a soft week for Fujian Tianma Science and Technology Group Co., Ltd (SHSE:603668) shares, which are down 12%. But that doesn't change the fact that the returns over the last five years have been pleasing. Its return of 42% has certainly bested the market return! While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 28% drop, in the last year.

Although Fujian Tianma Science and Technology Group has shed CN¥789m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Given that Fujian Tianma Science and Technology Group 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.

For the last half decade, Fujian Tianma Science and Technology Group can boast revenue growth at a rate of 20% per year. Even measured against other revenue-focussed companies, that's a good result. It's good to see that the stock has 7%, but not entirely surprising given revenue shows strong growth. If the strong revenue growth continues, we'd hope to see the share price to follow, in time. Opportunity lies where the market hasn't fully priced growth in the underlying business.

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

If you are thinking of buying or selling Fujian Tianma Science and Technology Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 7.7% in the last year, Fujian Tianma Science and Technology Group shareholders lost 28% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 7%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. To that end, you should learn about the 4 warning signs we've spotted with Fujian Tianma Science and Technology Group (including 3 which are concerning) .

Of course Fujian Tianma Science and Technology Group 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.