Yangzhou Guangling District Taihe Rural Micro-finance Company Limited (HKG:1915) has rebounded strongly over the last week, with the share price soaring 53%. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 17% in the last three years, falling well short of the market return.

The recent uptick of 53% could be a positive sign of things to come, so let's take a lot at historical fundamentals.

Check out our latest analysis for Yangzhou Guangling District Taihe Rural Micro-finance

We don't think that Yangzhou Guangling District Taihe Rural Micro-finance's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last three years Yangzhou Guangling District Taihe Rural Micro-finance saw its revenue shrink by 40% per year. That's definitely a weaker result than most pre-profit companies report. With revenue in decline, the share price decline of 5% per year is hardly undeserved. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. Of course, it is possible for businesses to bounce back from a revenue drop - but we'd want to see that before getting interested.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Yangzhou Guangling District Taihe Rural Micro-finance's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Yangzhou Guangling District Taihe Rural Micro-finance has rewarded shareholders with a total shareholder return of 4.7% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 1.7% per year over five years. 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 Yangzhou Guangling District Taihe Rural Micro-finance better, we need to consider many other factors. Take risks, for example - Yangzhou Guangling District Taihe Rural Micro-finance has 4 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

Of course Yangzhou Guangling District Taihe Rural Micro-finance 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 HK 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.