Shareholders 62% loss in China Agri-Products Exchange (HKG:149) partly attributable to the company's decline in earnings over past three years

While it may not be enough for some shareholders, we think it is good to see the China Agri-Products Exchange Limited (HKG:149) share price up 20% in a single quarter. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 62% in the last three years. So the improvement may be a real relief to some. Perhaps the company has turned over a new leaf.

While the last three years has been tough for China Agri-Products Exchange shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

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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.

During the three years that the share price fell, China Agri-Products Exchange's earnings per share (EPS) dropped by 74% each year. This fall in the EPS is worse than the 27% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on China Agri-Products Exchange's earnings, revenue and cash flow.

A Different Perspective

China Agri-Products Exchange provided a TSR of 14% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 5% endured over half a decade. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand China Agri-Products Exchange better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for China Agri-Products Exchange (of which 1 doesn't sit too well with us!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.