In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But every investor is virtually certain to have both over-performing and under-performing stocks. So we wouldn't blame long term Shenyang Yuanda Intellectual Industry Group Co.,Ltd (SZSE:002689) shareholders for doubting their decision to hold, with the stock down 31% over a half decade. And it's not just long term holders hurting, because the stock is down 25% in the last year. The falls have accelerated recently, with the share price down 20% in the last three months.

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

Shenyang Yuanda Intellectual Industry GroupLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last five years Shenyang Yuanda Intellectual Industry GroupLtd saw its revenue shrink by 1.0% per year. That's not what investors generally want to see. The share price decline at a rate of 6% per year is disappointing. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. Without profits, its hard to see how shareholders win if the revenue keeps falling.

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 Shenyang Yuanda Intellectual Industry GroupLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that Shenyang Yuanda Intellectual Industry GroupLtd shareholders are down 25% for the year. Unfortunately, that's worse than the broader market decline of 16%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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 be aware of the 1 warning sign we've spotted with Shenyang Yuanda Intellectual Industry GroupLtd .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.