Shareholders in TCL Zhonghuan Renewable Energy TechnologyLtd (SZSE:002129) have lost 70%, as stock drops 3.4% this past week

While not a mind-blowing move, it is good to see that the TCL Zhonghuan Renewable Energy Technology Co.,Ltd. (SZSE:002129) share price has gained 24% in the last three months. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 71%. So it's good to see it climbing back up. After all, could be that the fall was overdone.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

See our latest analysis for TCL Zhonghuan Renewable Energy TechnologyLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over the three years that the share price declined, TCL Zhonghuan Renewable Energy TechnologyLtd's earnings per share (EPS) dropped significantly, 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. However, we can say we'd expect to see a falling share price in this scenario.

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

Dive deeper into TCL Zhonghuan Renewable Energy TechnologyLtd's key metrics by checking this interactive graph of TCL Zhonghuan Renewable Energy TechnologyLtd's earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 14% in the last year, TCL Zhonghuan Renewable Energy TechnologyLtd shareholders lost 35% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 0.7% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. For example, we've discovered 2 warning signs for TCL Zhonghuan Renewable Energy TechnologyLtd that you should be aware of before investing here.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.