Jinan High-tech Development Co., Ltd. (SHSE:600807) shareholders will doubtless be very grateful to see the share price up 32% in the last month. But if you look at the last five years the returns have not been good. In fact, the share price is down 44%, which falls well short of the return you could get by buying an index fund.

On a more encouraging note the company has added CN¥363m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Jinan High-tech Development became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics may better explain the share price move.

The revenue decline of 3.0% isn't too bad. But if the market expected durable top line growth, then that could explain the share price weakness.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Jinan High-tech Development's financial health with this free report on its balance sheet.

A Different Perspective

Jinan High-tech Development shareholders are down 13% over twelve months, which isn't far from the market return of -13%. Unfortunately, last year's performance is a deterioration of an already poor long term track record, given the loss of 8% per year over the last five years. Weak performance over the long term usually destroys market confidence in a stock, but bargain hunters may want to take a closer look for signs of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Jinan High-tech Development better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Jinan High-tech Development , and understanding them should be part of your investment process.

But note: Jinan High-tech Development may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.