Earnings are growing at Zhejiang Huatie Emergency Equipment Science & TechnologyLtd (SHSE:603300) but shareholders still don't like its prospects

The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors in Zhejiang Huatie Emergency Equipment Science & Technology Co.,Ltd. (SHSE:603300) have tasted that bitter downside in the last year, as the share price dropped 29%. That's well below the market decline of 19%. However, the longer term returns haven't been so bad, with the stock down 14% in the last three years. The falls have accelerated recently, with the share price down 22% in the last three months. However, one could argue that the price has been influenced by the general market, which is down 12% in the same timeframe.

After losing 4.2% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for Zhejiang Huatie Emergency Equipment Science & TechnologyLtd

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Even though the Zhejiang Huatie Emergency Equipment Science & TechnologyLtd share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth.

It's surprising to see the share price fall so much, despite the improved EPS. So it's well worth checking out some other metrics, too.

With a low yield of 0.5% we doubt that the dividend influences the share price much. Zhejiang Huatie Emergency Equipment Science & TechnologyLtd's revenue is actually up 29% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We regret to report that Zhejiang Huatie Emergency Equipment Science & TechnologyLtd shareholders are down 29% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 19%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Zhejiang Huatie Emergency Equipment Science & TechnologyLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Zhejiang Huatie Emergency Equipment Science & TechnologyLtd , and understanding them should be part of your investment process.

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.