Beijing Tong Ren Tang Chinese Medicine (HKG:3613) shed HK$536 million as corporate earnings and investor returns trended lower last year

While that may not be enough for some shareholders, we think it’s good to see the Beijing Tong Ren Tang Chinese Medicine Company Limited (HKG:3613) share price up 17% in a single quarter. It’s not great that the stock is down from last year. But on the bright side, its return of 9.0%, is better than the market, which is down 0.13636069345349.

After losing 5.5% last week, it’s worth looking at company fundamentals to see what we can infer from past performance.

Check out our latest analysis for Beijing Tong Ren Tang Chinese Medicine

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

Unfortunately, Chinese Medicine Tong Ren Tang in Beijing had to report a 4.8% drop in EPS over the past year. The 14% share price decline is actually greater than the EPS decline. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious on the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see more details).

SEHK: 3613 Earnings per share growth December 23, 2022

It’s probably worth noting that the CEO is paid less than the median at companies of a similar size. It’s always worth keeping an eye on CEO compensation, but a more important question is whether the company will grow its profits over the years. It might be interesting to take a look at our free Beijing Tong Ren Tang Chinese Medicine earnings, revenue and cash flow report.

What about dividends?

It is important to consider the total shareholder return, as well as the stock price return, for a given stock. TSR is a calculation of return that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of all discounted capital raisings and spinoffs. It’s fair to say that the TSR gives a more complete picture of stocks that pay a dividend. In the case of Beijing Tong Ren Tang Chinese Medicine, it has a TSR of -9.0% for the past year. This exceeds the performance of its share price that we mentioned earlier. This is largely the result of its dividend payments!

A different perspective

While it was certainly disappointing to see that shares of Beijing Tong Ren Tang Chinese Medicine lost 9.0% throughout the year, it wasn’t nearly as bad as the market’s 14% loss. Longer-term investors wouldn’t be so upset, as they would have gained 4%, every year, over five years. The company may only face short-term problems, but shareholders should keep a close eye on the fundamentals. Most investors take the time to verify insider trading data. You can click here to see if insiders have been buying or selling.

For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on HK exchanges.

Valuation is complex, but we help make it simple.

Find out if Beijing Tong Ren Tang Chinese Medicine is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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