China Yongda Automobiles Services Holdings' (HKG:3669) earnings have declined over three years, contributing to shareholders 67% loss

China Yongda Automobiles Services Holdings Limited (HKG:3669) shareholders should be happy to see the share price up 11% in the last month. Meanwhile over the last three years the stock has dropped hard. Regrettably, the share price slid 73% in that period. So the improvement may be a real relief to some. After all, could be that the fall was overdone.

The recent uptick of 7.0% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for China Yongda Automobiles Services Holdings

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 three years that the share price fell, China Yongda Automobiles Services Holdings' earnings per share (EPS) dropped by 2.5% each year. This reduction in EPS is slower than the 35% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. This increased caution is also evident in the rather low P/E ratio, which is sitting at 4.92.

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

Dive deeper into China Yongda Automobiles Services Holdings' key metrics by checking this interactive graph of China Yongda Automobiles Services Holdings's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, China Yongda Automobiles Services Holdings' TSR for the last 3 years was -67%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

China Yongda Automobiles Services Holdings shareholders are down 19% for the year (even including dividends), but the market itself is up 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.7% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Take risks, for example - China Yongda Automobiles Services Holdings has 2 warning signs we think you should be aware of.

Of course China Yongda Automobiles Services Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.