Despite declining earnings, the company's high P/E ratio indicates investor optimism. However, if the P/E aligns with recent negative growth rates, shareholders may face disappointment. The high P/E and underperformance against market forecasts could risk a share price decline.

The high P/E ratio of Xiamen Leading Optics despite its falling earnings suggests that investors are overly optimistic and potentially setting themselves up for future disappointment should the P/E fall in alignment with the company's recent negative growth rates.

Xiamen Leading Optics' decreasing ROCE trend is concerning despite its reinvestment efforts. This could explain why the stock has only seen an 11% increase over the past three years. Investors might find more promising returns with potential multi-baggers elsewhere.