Kehua HoldingsLtd's (SHSE:603161) earnings have declined over year, contributing to shareholders 17% loss

This week we saw the Kehua Holdings Co.,Ltd (SHSE:603161) share price climb by 14%. But that is minimal compensation for the share price under-performance over the last year. After all, the share price is down 19% in the last year, significantly under-performing the market.

While the stock has risen 14% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

See our latest analysis for Kehua HoldingsLtd

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unfortunately Kehua HoldingsLtd reported an EPS drop of 11% for the last year. This reduction in EPS is not as bad as the 19% share price fall. This suggests the EPS fall has made some shareholders more nervous about the business.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Kehua HoldingsLtd's key metrics by checking this interactive graph of Kehua HoldingsLtd's earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 6.0% in the twelve months, Kehua HoldingsLtd shareholders did even worse, losing 17% (even including dividends). 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. Longer term investors wouldn't be so upset, since they would have made 0.8%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Kehua HoldingsLtd has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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 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.