Some Shanghai Yizhong Pharmaceutical Co., Ltd. (SHSE:688091) shareholders are probably rather concerned to see the share price fall 49% over the last three months. Despite this, the stock is a strong performer over the last year, no doubt about that. We're very pleased to report the share price shot up 126% in that time. So it may be that the share price is simply cooling off after a strong rise. More important, going forward, is how the business itself is going.

While the stock has fallen 13% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for Shanghai Yizhong Pharmaceutical

While Shanghai Yizhong Pharmaceutical made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at Shanghai Yizhong Pharmaceutical's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Shanghai Yizhong Pharmaceutical shareholders have gained 126% over the last year. Unfortunately the share price is down 49% over the last quarter. Shorter term share price moves often don't signify much about the business itself. 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 Shanghai Yizhong Pharmaceutical .

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CN 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.