China Qidian Guofeng Holdings Limited (HKG:1280) shareholders might be concerned after seeing the share price drop 17% in the last month. But over the last year the share price has taken off like one of Elon Musk's rockets. Indeed, the share price is up a whopping 411% in that time. So the recent fall isn't enough to negate the good performance. The real question is whether the fundamental business performance can justify the strong increase over the long term.

While the stock has fallen 8.3% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

See our latest analysis for China Qidian Guofeng Holdings

China Qidian Guofeng Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. 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 year China Qidian Guofeng Holdings saw its revenue grow by 28%. That's a fairly respectable growth rate. Arguably it's more than reflected in the truly wondrous share price gain of 411% in the last year. We're always cautious when the share price is up so much, but there's certainly enough revenue growth to justify taking a closer look at China Qidian Guofeng Holdings.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on China Qidian Guofeng Holdings' earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that China Qidian Guofeng Holdings shareholders have received a total shareholder return of 411% over one year. That gain is better than the annual TSR over five years, which is 5%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand China Qidian Guofeng Holdings better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with China Qidian Guofeng Holdings (at least 2 which are significant) , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar).

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.