Investors Who Bought Shanghai Haohai Biological Technology (HKG:6826) Shares A Year Ago Are Now Up 58%

It might be of some concern to shareholders to see the Shanghai Haohai Biological Technology Co., Ltd. (HKG:6826) share price down 20% in the last month. But that doesn't change the reality that over twelve months the stock has done really well. After all, the share price is up a market-beating 58% in that time.

View our latest analysis for Shanghai Haohai Biological Technology

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).

During the last year, Shanghai Haohai Biological Technology actually saw its earnings per share drop 41%.

Given the share price gain, we doubt the market is measuring progress with EPS. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.

We doubt the modest 1.6% dividend yield is doing much to support the share price. Shanghai Haohai Biological Technology's revenue actually dropped 13% over last year. So the fundamental metrics don't provide an obvious explanation for the share price gain.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So it makes a lot of sense to check out what analysts think Shanghai Haohai Biological Technology will earn in the future (free profit forecasts).

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Shanghai Haohai Biological Technology's TSR for the last year was 62%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Shanghai Haohai Biological Technology shareholders have received a total shareholder return of 62% over the last year. And that does include the dividend. That's better than the annualised return of 4% 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. It's always interesting to track share price performance over the longer term. But to understand Shanghai Haohai Biological Technology better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Shanghai Haohai Biological Technology you should be aware of.

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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 HK exchanges.

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This article by Simply Wall St is general in nature. 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.
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