It's been a soft week for Liuzhou Liangmianzhen Co., Ltd. (SHSE:600249) shares, which are down 15%. But that doesn't change the fact that the returns over the last three years have been respectable. In fact the stock is up 27%, which is better than the market return of 26%.
While this past week has detracted from the company's three-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
See our latest analysis for Liuzhou Liangmianzhen
Because Liuzhou Liangmianzhen made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good 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 3 years Liuzhou Liangmianzhen saw its revenue shrink by 21% per year. Despite the lack of revenue growth, the stock has returned 8%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
SHSE:600249 Earnings and Revenue Growth November 29th 2022If you are thinking of buying or selling Liuzhou Liangmianzhen stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We're pleased to report that Liuzhou Liangmianzhen shareholders have received a total shareholder return of 6.7% over one year. That certainly beats the loss of about 3% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. You could get a better understanding of Liuzhou Liangmianzhen's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
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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.