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Yunnan Lincang Xinyuan Germanium IndustryLTD (SZSE:002428) Pulls Back 4.6% This Week, but Still Delivers Shareholders Solid 19% CAGR Over 5 Years

Simply Wall St ·  Nov 22, 2023 19:16

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on a lighter note, a good company can see its share price rise well over 100%. One great example is Yunnan Lincang Xinyuan Germanium Industry Co.,LTD (SZSE:002428) which saw its share price drive 136% higher over five years. On the other hand, the stock price has retraced 4.6% in the last week.

Since the long term performance has been good but there's been a recent pullback of 4.6%, let's check if the fundamentals match the share price.

See our latest analysis for Yunnan Lincang Xinyuan Germanium IndustryLTD

Yunnan Lincang Xinyuan Germanium IndustryLTD wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 5 years Yunnan Lincang Xinyuan Germanium IndustryLTD saw its revenue grow at 4.0% per year. That's not a very high growth rate considering the bottom line. In comparison, the share price rise of 19% per year over the last half a decade is pretty impressive. While we wouldn't be overly concerned, it might be worth checking whether you think the fundamental business gains really justify the share price action. Some might suggest that the sentiment around the stock is rather positive.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
SZSE:002428 Earnings and Revenue Growth November 23rd 2023

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Yunnan Lincang Xinyuan Germanium IndustryLTD shareholders have received a total shareholder return of 30% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 19% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. You could get a better understanding of Yunnan Lincang Xinyuan Germanium IndustryLTD's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

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 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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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