Despite poor growth, the company trades at a high P/E. Investors may hope for a business turnaround, but a P/E drop could disappoint. High P/E and shrinking earnings pose significant risk, potentially leading to an excessive premium for new investors.

Guangdong Green Precision Components' falling ROCE and sales trends are worrisome. The business's increased capital employment over five years, coupled with declining returns and sales, may suggest efficiency loss. The stock's 21% drop from last year reflects investors' negative reactions.

Despite the company's downtrend, investor optimism retains its high P/E ratio, hoping for future market outperformance. However, declining earnings may make this valuation unsustainable, meaning share prices could plunge.

Guangdong Green Precision Components' declining ROCE trend suggests less-than-impressive financial performance; it doesn't signify a high-return investment. Despite a 24% stock rise last year, if this pattern continues, exponential future returns seem unlikely.