The market has become more cautious towards the stock, reflected in its fairly low P/E ratio of 2.13. The company's recent gains of 18%, including dividends, indicate positive sentiment.

Given China Yangtze Power's declining earnings and lower-than-market projected growth, most investors likely anticipate limited future growth, thereby justifying the company's lower P/E ratio. Unless these conditions improve, they may continue to influence the share price.

Despite China Yangtze Power's good industry ROE, its high use of debt raises concerns. Although debt can enhance ROE, it adds risk, making a low-ROE, high-debt business less attractive.