Earnings growth of 0.4% over 5 years hasn't been enough to translate into positive returns for XinJiang Beiken Energy EngineeringLtd (SZSE:002828) shareholders

While not a mind-blowing move, it is good to see that the XinJiang Beiken Energy Engineering Co.,Ltd. (SZSE:002828) share price has gained 11% in the last three months. But that doesn't change the fact that the returns over the last five years have been less than pleasing. After all, the share price is down 29% in that time, significantly under-performing the market.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Check out our latest analysis for XinJiang Beiken Energy EngineeringLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, XinJiang Beiken Energy EngineeringLtd moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics might give us a better handle on how its value is changing over time.

The modest 1.0% dividend yield is unlikely to be guiding the market view of the stock. It could be that the revenue decline of 9.7% per year is viewed as evidence that XinJiang Beiken Energy EngineeringLtd is shrinking. That could explain the weak share price.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that XinJiang Beiken Energy EngineeringLtd shareholders have received a total shareholder return of 15% over one year. That's including the dividend. There's no doubt those recent returns are much better than the TSR loss of 5% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand XinJiang Beiken Energy EngineeringLtd better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for XinJiang Beiken Energy EngineeringLtd (of which 2 are a bit concerning!) you should know about.

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.