Ningbo Zhongbai (SHSE:600857 shareholders incur further losses as stock declines 13% this week, taking three-year losses to 15%

Ningbo Zhongbai Co., Ltd. (SHSE:600857) shareholders will doubtless be very grateful to see the share price up 52% in the last quarter. But we must note it seems the three year returns are less impressive. To be specific, the share price is a full 15% lower, while the market is down , with a return of (-14%)..

Since Ningbo Zhongbai has shed CN¥267m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Ningbo Zhongbai

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.

Ningbo Zhongbai saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But it's safe to say we'd generally expect the share price to be lower as a result!

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It might be well worthwhile taking a look at our free report on Ningbo Zhongbai's earnings, revenue and cash flow.

A Different Perspective

Investors in Ningbo Zhongbai had a tough year, with a total loss of 15% (including dividends), against a market gain of about 14%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.9% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Ningbo Zhongbai better, we need to consider many other factors. Even so, be aware that Ningbo Zhongbai is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.