Investors' belief in Hubei Xingfa Chemicals Group's poor earnings performance likely causes its low P/E ratio. The weak outlook is suppressing the shares, making a strong price rise unlikely soon.

Despite recent sell-off, long term shareholders gained 15% annually over half a decade. Market caution is indicated by a low P/E ratio of 7.17. The sell-off could be an opportunity, given signs of long term growth.

Despite flat ROCE over five years, consistent returns and reinvestment generate positive market expectations as the stock rose. Reduction in current liabilities may decrease some operational risks.