Hangzhou Shunwang Technology CoLtd (SZSE:300113) earnings and shareholder returns have been trending downwards for the last five years, but the stock advances 4.6% this past week

It is a pleasure to report that the Hangzhou Shunwang Technology Co,Ltd (SZSE:300113) is up 57% in the last quarter. But that doesn't change the fact that the returns over the last five years have been less than pleasing. You would have done a lot better buying an index fund, since the stock has dropped 40% in that half decade.

Although the past week has been more reassuring for shareholders, they're still in the red over the last five years, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for Hangzhou Shunwang Technology CoLtd

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

During five years of share price growth, Hangzhou Shunwang Technology CoLtd 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 may better explain the share price move.

The modest 0.5% dividend yield is unlikely to be guiding the market view of the stock. Revenue is actually up 2.2% over the time period. A more detailed examination of the revenue and earnings may or may not explain why the share price languishes; there could be an opportunity.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We know that Hangzhou Shunwang Technology CoLtd has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Hangzhou Shunwang Technology CoLtd

A Different Perspective

Hangzhou Shunwang Technology CoLtd shareholders gained a total return of 3.4% during the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 7% per year, over five years. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand Hangzhou Shunwang Technology CoLtd better, we need to consider many other factors. Take risks, for example - Hangzhou Shunwang Technology CoLtd has 1 warning sign 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.