Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Shenzhen Sunwin Intelligent Co., Ltd. (SZSE:300044) share price is 46% higher than it was a year ago, much better than the market decline of around 13% (not including dividends) in the same period. That's a solid performance by our standards! Looking back further, the stock price is 44% higher than it was three years ago.

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

Given that Shenzhen Sunwin Intelligent 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Shenzhen Sunwin Intelligent grew its revenue by 16% last year. That's a fairly respectable growth rate. Buyers pushed the share price 46% in response, which isn't unreasonable. If the company can maintain the revenue growth, the share price could go higher still. But it's crucial to check profitability and cash flow before forming a view on the future.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We're pleased to report that Shenzhen Sunwin Intelligent shareholders have received a total shareholder return of 46% over one year. That certainly beats the loss of about 4% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Sunwin Intelligent better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Shenzhen Sunwin Intelligent you should know about.

Of course Shenzhen Sunwin Intelligent 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.