Shanghai Zijiang Enterprise Group (SHSE:600210) sheds CN¥455m, company earnings and investor returns have been trending downwards for past three years

One of the frustrations of investing is when a stock goes down. But when the market is down, you're bound to have some losers. The Shanghai Zijiang Enterprise Group Co., Ltd. (SHSE:600210) is down 32% over three years, but the total shareholder return is -22% once you include the dividend. That's better than the market which declined 27% over the last three years. The falls have accelerated recently, with the share price down 19% in the last three months.

After losing 5.9% 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 Shanghai Zijiang Enterprise Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Shanghai Zijiang Enterprise Group saw its EPS decline at a compound rate of 2.6% per year, over the last three years. The share price decline of 12% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Shanghai Zijiang Enterprise Group's key metrics by checking this interactive graph of Shanghai Zijiang Enterprise Group's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Shanghai Zijiang Enterprise Group, it has a TSR of -22% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While it's never nice to take a loss, Shanghai Zijiang Enterprise Group shareholders can take comfort that , including dividends,their trailing twelve month loss of 2.8% wasn't as bad as the market loss of around 15%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 10% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Shanghai Zijiang Enterprise Group .

Of course Shanghai Zijiang Enterprise Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com