Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd's (SHSE:600363) earnings growth rate lags the 23% CAGR delivered to shareholders

Jiangxi Lian Chuang Optoelectronic Science And Technology Co.,lTd. (SHSE:600363) shareholders have seen the share price descend 15% over the month. But in stark contrast, the returns over the last half decade have impressed. We think most investors would be happy with the 183% return, over that period. To some, the recent pullback wouldn't be surprising after such a fast rise. Of course, that doesn't necessarily mean it's cheap now.

Although Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd has shed CN¥1.3b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd

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. 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.

Over half a decade, Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd managed to grow its earnings per share at 11% a year. This EPS growth is slower than the share price growth of 23% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 56.92.

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

Dive deeper into Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd's key metrics by checking this interactive graph of Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd the TSR over the last 5 years was 186%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's good to see that Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd has rewarded shareholders with a total shareholder return of 42% in the last twelve months. Of course, that includes the dividend. That gain is better than the annual TSR over five years, which is 23%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Jiangxi Lian Chuang Optoelectronic Science And TechnologylTd that you should be aware of.

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.