This week we saw the China Graphene Group Limited (HKG:63) share price climb by 18%. But the last three years have seen a terrible decline. Indeed, the share price is down a whopping 72% in the last three years. So it's about time shareholders saw some gains. Only time will tell if the company can sustain the turnaround.

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Check out our latest analysis for China Graphene Group

Given that China Graphene Group 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over three years, China Graphene Group grew revenue at 14% per year. That's a pretty good rate of top-line growth. So it's hard to believe the share price decline of 35% per year is due to the revenue. More likely, the market was spooked by the cost of that revenue. This is exactly why investors need to diversify - even when a loss making company grows revenue, it can fail to deliver for shareholders.

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

If you are thinking of buying or selling China Graphene Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 13% in the twelve months, China Graphene Group shareholders did even worse, losing 71%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. On the bright side, long term shareholders have made money, with a gain of 6.0% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

We will like China Graphene Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.