Optimism for Shenzhen Tianyuan DIC Information Technology (SZSE:300047) has grown this past week, despite three-year decline in earnings

Shenzhen Tianyuan DIC Information Technology Co., Ltd. (SZSE:300047) shareholders have seen the share price descend 12% over the month. But that doesn't change the fact that the returns over the last three years have been pleasing. In fact, the company's share price bested the return of its market index in that time, posting a gain of 94%.

Since it's been a strong week for Shenzhen Tianyuan DIC Information Technology shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Shenzhen Tianyuan DIC Information Technology

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 the last three years, Shenzhen Tianyuan DIC Information Technology failed to grow earnings per share, which fell 38% (annualized).

So we doubt that the market is looking to EPS for its main judge of the company's value. Therefore, we think it's worth considering other metrics as well.

Languishing at just 0.1%, we doubt the dividend is doing much to prop up the share price. It could be that the revenue growth of 12% per year is viewed as evidence that Shenzhen Tianyuan DIC Information Technology is growing. In that case, the company may be sacrificing current earnings per share to drive growth, and maybe shareholder's faith in better days ahead will be rewarded.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Shenzhen Tianyuan DIC Information Technology's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Shenzhen Tianyuan DIC Information Technology shareholders have received a total shareholder return of 51% over the last year. And that does include the dividend. That's better than the annualised return of 12% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Shenzhen Tianyuan DIC Information Technology , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.