We Ran A Stock Scan For Earnings Growth And AVIC Xi'an Aircraft Industry Group (SZSE:000768) Passed With Ease

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

In contrast to all that, many investors prefer to focus on companies like AVIC Xi'an Aircraft Industry Group (SZSE:000768), which has not only revenues, but also profits. Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

View our latest analysis for AVIC Xi'an Aircraft Industry Group

How Fast Is AVIC Xi'an Aircraft Industry Group Growing?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. That makes EPS growth an attractive quality for any company. AVIC Xi'an Aircraft Industry Group managed to grow EPS by 8.6% per year, over three years. That's a good rate of growth, if it can be sustained.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. AVIC Xi'an Aircraft Industry Group maintained stable EBIT margins over the last year, all while growing revenue 7.9% to CN¥41b. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for AVIC Xi'an Aircraft Industry Group's future EPS 100% free.

Are AVIC Xi'an Aircraft Industry Group Insiders Aligned With All Shareholders?

Prior to investment, it's always a good idea to check that the management team is paid reasonably. Pay levels around or below the median, can be a sign that shareholder interests are well considered. For companies with market capitalisations over CN¥58b, like AVIC Xi'an Aircraft Industry Group, the median CEO pay is around CN¥2.8m.

AVIC Xi'an Aircraft Industry Group's CEO took home a total compensation package of CN¥755k in the year prior to December 2023. First impressions seem to indicate a compensation policy that is favourable to shareholders. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. Generally, arguments can be made that reasonable pay levels attest to good decision-making.

Should You Add AVIC Xi'an Aircraft Industry Group To Your Watchlist?

As previously touched on, AVIC Xi'an Aircraft Industry Group is a growing business, which is encouraging. Not only that, but the CEO is paid quite reasonably, which should prompt investors to feel more trusting of the board of directors. So all in all AVIC Xi'an Aircraft Industry Group is worthy at least considering for your watchlist. Another important measure of business quality not discussed here, is return on equity (ROE). Click on this link to see how AVIC Xi'an Aircraft Industry Group shapes up to industry peers, when it comes to ROE.

Although AVIC Xi'an Aircraft Industry Group certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Chinese companies that not only boast of strong growth but have strong insider backing.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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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.