The market's optimism about the company's growth three years ago may have been misplaced. The company's poor performance last year, worse than the annualized loss of 7% over the last half decade, could indicate unresolved challenges. This long-term share price weakness may be a bad sign, but contrarian investors might see a potential for a turnaround.

Chongqing Fuling Zhacai Group's falling ROCE and stagnant sales growth despite reinvestment may worry investors. The 31% stock drop in five years shows investor doubt about future trends. The company's lowered current liabilities may reduce business risk but could also suggest less ROCE efficiency.

Despite reinvestments, returns are declining and the total return to shareholders over the last five years has been flat. Constant capital investments without sales growth may not promise potential multi-bagger returns.

Chongqing Fuling Zhacai Group's EPS growth was overestimated according to market expectations three years ago. The drop in share price might provide an opportunity for investors if the stock is deemed undervalued. Yet, the company did experience a total annual loss of 1.3% over five years and there are 2 cautionary indicators that investors should assess.