This week we saw the China Modern Dairy Holdings Ltd. (HKG:1117) share price climb by 12%. But that is little comfort to those holding over the last half decade, sitting on a big loss. The share price has failed to impress anyone , down a sizable 66% during that time. So is the recent increase sufficient to restore confidence in the stock? Not yet. Of course, this could be the start of a turnaround.

Check out our latest analysis for China Modern Dairy Holdings

Because China Modern Dairy Holdings 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. 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 half decade, China Modern Dairy Holdings saw its revenue increase by 0.9% per year. That's not a very high growth rate considering it doesn't make profits. This lacklustre growth has no doubt fueled the loss of 19% per year, in that time. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in China Modern Dairy Holdings. However, it's possible too many in the market will ignore it, and there may be an opportunity if it starts to recover down the track.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at China Modern Dairy Holdings's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that China Modern Dairy Holdings has rewarded shareholders with a total shareholder return of 1.0% in the last twelve months. Notably the five-year annualised TSR loss of 19% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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