Shenzhen Sunway Communication Co., Ltd. (SZSE:300136) shareholders should be happy to see the share price up 24% in the last month. But that doesn't change the fact that the returns over the last three years have been disappointing. Regrettably, the share price slid 56% in that period. So it is really good to see an improvement. Perhaps the company has turned over a new leaf.

On a more encouraging note the company has added CN¥2.1b to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

See our latest analysis for Shenzhen Sunway Communication

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 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).

Shenzhen Sunway Communication saw its EPS decline at a compound rate of 12% per year, over the last three years. This reduction in EPS is slower than the 24% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that Shenzhen Sunway Communication has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

A Different Perspective

It's good to see that Shenzhen Sunway Communication has rewarded shareholders with a total shareholder return of 47% in the last twelve months. And that does include the dividend. Notably the five-year annualised TSR loss of 1.8% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Sunway Communication better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Shenzhen Sunway Communication you should be aware of.

Of course Shenzhen Sunway Communication 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 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.