Shenzhen Hepalink Pharmaceutical Group (SZSE:002399) adds CN¥1.7b to market cap in the past 7 days, though investors from five years ago are still down 51%

This week we saw the Shenzhen Hepalink Pharmaceutical Group Co., Ltd. (SZSE:002399) share price climb by 14%. But that can't change the reality that over the longer term (five years), the returns have been really quite dismal. In that time the share price has delivered a rude shock to holders, who find themselves down 52% after a long stretch. So we're hesitant to put much weight behind the short term increase. We'd err towards caution given the long term under-performance.

On a more encouraging note the company has added CN¥1.7b 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.

Check out our latest analysis for Shenzhen Hepalink Pharmaceutical Group

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

In the last half decade Shenzhen Hepalink Pharmaceutical Group saw its share price fall as its EPS declined below zero. At present it's hard to make valid comparisons between EPS and the share price. However, we can say we'd expect to see a falling share price in this scenario.

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 Shenzhen Hepalink Pharmaceutical Group's key metrics by checking this interactive graph of Shenzhen Hepalink Pharmaceutical Group's earnings, revenue and cash flow.

A Different Perspective

The total return of 17% received by Shenzhen Hepalink Pharmaceutical Group shareholders over the last year isn't far from the market return of -17%. So last year was actually even worse than the last five years, which cost shareholders 9% per year. It will probably take a substantial improvement in the fundamental performance for the company to reverse this trend. You could get a better understanding of Shenzhen Hepalink Pharmaceutical Group's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Of course Shenzhen Hepalink Pharmaceutical 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.

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