Yahoo Finanza Easy Come, Easy Go: How Xinchen China Power Holdings (HKG:1148) Shareholders Got Unlucky And Saw 90% Of Their Cash Evaporate
Some stocks are best avoided. We don't wish catastrophic capital loss on anyone. Imagine if you held Xinchen China Power Holdings Limited (HKG:1148) for half a decade as the share price tanked 90%. Shareholders have had an even rougher run lately, with the share price down 16% in the last 90 days. But this could be related to the weak market, which is down 10% in the same period.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
Check out our latest analysis for Xinchen China Power Holdings
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Looking back five years, both Xinchen China Power Holdings's share price and EPS declined; the latter at a rate of 52% per year. This fall in the EPS is worse than the 37% compound annual share price fall. The relatively muted share price reaction might be because the market expects the business to turn around. With a P/E ratio of 58.60, it's fair to say the market sees a brighter future for the business.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Xinchen China Power Holdings's key metrics by checking this interactive graph of Xinchen China Power Holdings's earnings, revenue and cash flow.
A Different Perspective
While it's certainly disappointing to see that Xinchen China Power Holdings shares lost 4.2% throughout the year, that wasn't as bad as the market loss of 8.2%. Of far more concern is the 37% p.a. loss served to shareholders over the last five years. While the losses are slowing we doubt many shareholders are happy with the stock. It's always interesting to track share price performance over the longer term. But to understand Xinchen China Power Holdings better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for Xinchen China Power Holdings you should be aware of, and 2 of them shouldn't be ignored.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
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This article by Simply Wall St is general in nature. 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. Thank you for reading.
