For many, the main point of investing is to generate higher returns than the overall market. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in Guangdong Songfa Ceramics Co.,Ltd. (SHSE:603268), since the last five years saw the share price fall 12%. On top of that, the share price is down 19% in the last week. However, this move may have been influenced by the broader market, which fell 9.4% in that time.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Given that Guangdong Songfa CeramicsLtd 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade Guangdong Songfa CeramicsLtd reduced its trailing twelve month revenue by 18% for each year. That's definitely a weaker result than most pre-profit companies report. It seems pretty reasonable to us that the share price dipped 2% per year in that time. We doubt many shareholders are delighted with this share price performance. It is possible for businesses to bounce back but as Buffett says, 'turnarounds seldom turn'.

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

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

A Different Perspective

While it's never nice to take a loss, Guangdong Songfa CeramicsLtd shareholders can take comfort that their trailing twelve month loss of 3.2% wasn't as bad as the market loss of around 26%. Unfortunately, last year's performance may indicate unresolved challenges, given that it's worse than the annualised loss of 2% over the last half decade. Whilst Baron Rothschild does tell the investor "buy when there's blood in the streets, even if the blood is your own", buyers would need to examine the data carefully to be comfortable that the business itself is sound. It's always interesting to track share price performance over the longer term. But to understand Guangdong Songfa CeramicsLtd better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Guangdong Songfa CeramicsLtd you should be aware of, and 2 of them are a bit concerning.

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.