Shenzhen Kingsun Science & TechnologyLtd's (SZSE:300235) one-year earnings growth trails the notable shareholder returns

The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. To wit, the Shenzhen Kingsun Science & Technology Co.,Ltd (SZSE:300235) share price is 69% higher than it was a year ago, much better than the market return of around 17% (not including dividends) in the same period. So that should have shareholders smiling. Also impressive, the stock is up 45% over three years, making long term shareholders happy, too.

Since the stock has added CN¥301m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Shenzhen Kingsun Science & TechnologyLtd

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

Shenzhen Kingsun Science & TechnologyLtd was able to grow EPS by 9.5% in the last twelve months. This EPS growth is significantly lower than the 69% increase in the share price. This indicates that the market is now more optimistic about the stock. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 126.07.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into Shenzhen Kingsun Science & TechnologyLtd's key metrics by checking this interactive graph of Shenzhen Kingsun Science & TechnologyLtd's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Shenzhen Kingsun Science & TechnologyLtd shareholders have received a total shareholder return of 69% over the last year. That's including the dividend. Notably the five-year annualised TSR loss of 5% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Kingsun Science & TechnologyLtd better, we need to consider many other factors. Take risks, for example - Shenzhen Kingsun Science & TechnologyLtd has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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.