WPG (Shanghai) Smart Water PublicLtd (SHSE:603956) adds CN¥474m to market cap in the past 7 days, though investors from five years ago are still down 57%

WPG (Shanghai) Smart Water Public Co.,Ltd. (SHSE:603956) shareholders should be happy to see the share price up 25% in the last month. But that is little comfort to those holding over the last half decade, sitting on a big loss. Indeed, the share price is down 60% in the period. So we're not so sure if the recent bounce should be celebrated. We'd err towards caution given the long term under-performance.

On a more encouraging note the company has added CN¥474m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

See our latest analysis for WPG (Shanghai) Smart Water PublicLtd

Because WPG (Shanghai) Smart Water PublicLtd made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, WPG (Shanghai) Smart Water PublicLtd grew its revenue at 11% per year. That's a fairly respectable growth rate. The share price, meanwhile, has fallen 10% compounded, over five years. It seems probably that the business has failed to live up to initial expectations. That could lead to an opportunity if the company is going to become profitable sooner rather than later.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling WPG (Shanghai) Smart Water PublicLtd stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of WPG (Shanghai) Smart Water PublicLtd, it has a TSR of -57% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

WPG (Shanghai) Smart Water PublicLtd provided a TSR of 11% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 9% endured over half a decade. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand WPG (Shanghai) Smart Water PublicLtd better, we need to consider many other factors. Even so, be aware that WPG (Shanghai) Smart Water PublicLtd is showing 2 warning signs in our investment analysis , you should know about...

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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.