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The past three years for PETRONAS Chemicals Group Berhad (KLSE:PCHEM) investors has not been profitable

Simply Wall St · 07/04 02:05

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term PETRONAS Chemicals Group Berhad (KLSE:PCHEM) shareholders have had a particularly rough ride in the last three year. So they might be feeling emotional about the 58% share price collapse, in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 44% lower in that time.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

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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.

PETRONAS Chemicals Group Berhad saw its EPS decline at a compound rate of 61% per year, over the last three years. This fall in the EPS is worse than the 25% compound annual share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in. This positive sentiment is also reflected in the generous P/E ratio of 57.59.

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

earnings-per-share-growth
KLSE:PCHEM Earnings Per Share Growth July 4th 2025

It might be well worthwhile taking a look at our free report on PETRONAS Chemicals Group Berhad's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for PETRONAS Chemicals Group Berhad the TSR over the last 3 years was -54%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

While the broader market lost about 5.7% in the twelve months, PETRONAS Chemicals Group Berhad shareholders did even worse, losing 42% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand PETRONAS Chemicals Group Berhad better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with PETRONAS Chemicals Group Berhad .

Of course PETRONAS Chemicals Group Berhad may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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