Shang Hai Ya Tong Co.,Ltd. (SHSE:600692) shareholders might be concerned after seeing the share price drop 13% in the last week. But that shouldn't obscure the pleasing returns achieved by shareholders over the last three years. In the last three years the share price is up, 49%: better than the market.

While the stock has fallen 13% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During three years of share price growth, Shang Hai Ya TongLtd moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Shang Hai Ya TongLtd's key metrics by checking this interactive graph of Shang Hai Ya TongLtd's earnings, revenue and cash flow.

A Different Perspective

Shang Hai Ya TongLtd shareholders are up 8.5% for the year (even including dividends). But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 8% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand Shang Hai Ya TongLtd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Shang Hai Ya TongLtd you should be aware of, and 1 of them doesn't sit too well with us.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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.