The five-year shareholder returns and company earnings persist lower as Yeahka (HKG:9923) stock falls a further 8.9% in past week

It is doubtless a positive to see that the Yeahka Limited (HKG:9923) share price has gained some 53% in the last three months. But that doesn't change the fact that the returns over the last half decade have been disappointing. In fact, the share price has declined rather badly, down some 69% in that time. So we're not so sure if the recent bounce should be celebrated. We'd err towards caution given the long term under-performance.

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

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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years over which the share price declined, Yeahka's earnings per share (EPS) dropped by 17% each year. Readers should note that the share price has fallen faster than the EPS, at a rate of 21% per year, over the period. This implies that the market is more cautious about the business these days. Of course, with a P/E ratio of 60.62, the market remains optimistic.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Yeahka's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Yeahka shareholders gained a total return of 19% during the year. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 11% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. To that end, you should learn about the 2 warning signs we've spotted with Yeahka (including 1 which is significant) .

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong 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.