As every investor would know, not every swing hits the sweet spot. But really bad investments should be rare. So spare a thought for the long term shareholders of China Agroforestry Low-Carbon Holdings Limited (HKG:1069); the share price is down a whopping 81% in the last three years. That would be a disturbing experience. Unhappily, the share price slid 1.7% in the last week.

We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.

See our latest analysis for China Agroforestry Low-Carbon Holdings

Given that China Agroforestry Low-Carbon Holdings 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 three years, China Agroforestry Low-Carbon Holdings saw its revenue grow by 64% per year, compound. That is faster than most pre-profit companies. So on the face of it we’re really surprised to see the share price down 43% a year in the same time period. You’d want to take a close look at the balance sheet, as well as the losses. Ultimately, revenue growth doesn’t amount to much if the business can’t scale well. Unless the balance sheet is strong, the company might have to raise capital.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized 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. Dive deeper into the earnings by checking this interactive graph of China Agroforestry Low-Carbon Holdings’s earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

Investors should note that there’s a difference between China Agroforestry Low-Carbon Holdings’s total shareholder return (TSR) and its share price change, which we’ve covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings. We note that China Agroforestry Low-Carbon Holdings’s TSR, at -78% is higher than its share price rise of -81%. When you consider it hasn’t been paying a dividend, this data suggests shareholders may have had the opportunity to acquire attractively priced shares in a discounted capital raising.