ShanXi C&Y Pharmaceutical GroupLTD (SZSE:300254) pops 19% this week, taking three-year gains to 26%

It hasn't been the best quarter for ShanXi C&Y Pharmaceutical Group Co.,LTD. (SZSE:300254) shareholders, since the share price has fallen 10% in that time. But that shouldn't obscure the pleasing returns achieved by shareholders over the last three years. To wit, the share price did better than an index fund, climbing 26% during that period.

Since the stock has added CN¥356m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for ShanXi C&Y Pharmaceutical GroupLTD

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 three years of share price growth, ShanXi C&Y Pharmaceutical GroupLTD moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on ShanXi C&Y Pharmaceutical GroupLTD's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that ShanXi C&Y Pharmaceutical GroupLTD shareholders have received a total shareholder return of 22% over one year. That gain is better than the annual TSR over five years, which is 4%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - ShanXi C&Y Pharmaceutical GroupLTD has 3 warning signs (and 1 which makes us a bit uncomfortable) 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.

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