Investors are selling Aoyuan Beauty Valley Technology Ltd (SZSE:000615), with the lack of profits no doubt contributing to three years of losses for shareholders.

As any investor knows, not every swing hits the sweet spot. However, truly bad investments should be rare. So think for a moment about long-term shareholders. Aoyuan Beauty Valley Technology Co., Ltd. (SZSE:000615); The stock price has fallen a whopping 75% in the past three years. That must be an unsettling experience. Recent news that the stock price has fallen 63% in one year is not very reassuring. Shareholders have fared even worse recently, with the stock price down 33% over the past 90 days.

Investor sentiment is not positive on Aoyuan Beauty Valley TechnologyLtd given the past week, so let’s take a look to see if there is a mismatch between its fundamentals and the stock price.

Check out our latest analysis for Aoyuan Beauty Valley Technology Ltd.

Considering that Aoyuan Beauty Valley TechnologyLtd didn’t make a profit in the last twelve months, we’ll focus on its revenue growth to get a quick look at the company’s business development. Generally speaking, unprofitable companies are expected to have steady revenue growth every year. That’s because rapid growth in revenue can often be easily extrapolated to predict profits of considerable size.

Over the past three years, Aoyuan Beauty Valley TechnologyLtd’s revenue has decreased by 30% per year. This means that the earnings trend is very weak compared to other loss-making companies. The rapid share price decline at a compound annual rate of 21% reflects this weak fundamental performance. It is preferable to leave it to the clown to catch the falling knife, as with this stock. There’s a good reason why investors often refer to buying stocks that have fallen sharply as trying to catch a falling knife. please think about it.

The image below shows how earnings and revenue have changed over time (unveil the exact values ​​by clicking on the image).

this free This interactive report on Aoyuan Beauty Valley TechnologyLtd’s balance sheet strength is a great starting point if you want to investigate the stock further.

different perspective

We’re disappointed to report that Aoyuan Beauty Valley TechnologyLtd shareholders are down 63% over the year. Unfortunately, this is a worse situation than his 17% decline in the overall market. That being said, it is inevitable that some stocks will be oversold in a down market. The key is to keep an eye on fundamental developments. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the 9% annualized loss over the past five years. I know Baron Rothschild said investors should “buy when there’s blood on the streets,” but investors should first make sure they’re buying a quality business. Warns you that you need to confirm. It’s always interesting to track stock performance over the long term. However, to understand Aoyuan Beauty Valley TechnologyLtd better, you need to consider many other factors. Still, please note that Aoyuan Beauty Valley TechnologyLtd. 1 warning sign in investment analysis you should know…

If you want to check out another company with potentially better financials, don’t miss this free A list of companies that have proven they can grow revenue.

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 using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.