If EPS Growth Is Important To You, Chongqing Mas Sci.&Tech.Co.Ltd (SZSE:300275) Presents An Opportunity

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

In contrast to all that, many investors prefer to focus on companies like Chongqing Mas Sci.&Tech.Co.Ltd (SZSE:300275), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Chongqing Mas Sci.&Tech.Co.Ltd with the means to add long-term value to shareholders.

Check out our latest analysis for Chongqing Mas Sci.&Tech.Co.Ltd

Chongqing Mas Sci.&Tech.Co.Ltd's Earnings Per Share Are Growing

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Chongqing Mas Sci.&Tech.Co.Ltd managed to grow EPS by 16% per year, over three years. That's a good rate of growth, if it can be sustained.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Chongqing Mas Sci.&Tech.Co.Ltd achieved similar EBIT margins to last year, revenue grew by a solid 21% to CN¥437m. That's progress.

The chart below shows how the company's bottom and top lines have progressed 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 Chongqing Mas Sci.&Tech.Co.Ltd's future EPS 100% free.

Are Chongqing Mas Sci.&Tech.Co.Ltd Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that Chongqing Mas Sci.&Tech.Co.Ltd insiders have a significant amount of capital invested in the stock. Given insiders own a significant chunk of shares, currently valued at CN¥556m, they have plenty of motivation to push the business to succeed. That holding amounts to 22% of the stock on issue, thus making insiders influential owners of the business and aligned with the interests of shareholders.

It's good to see that insiders are invested in the company, but are remuneration levels reasonable? A brief analysis of the CEO compensation suggests they are. For companies with market capitalisations between CN¥1.4b and CN¥5.8b, like Chongqing Mas Sci.&Tech.Co.Ltd, the median CEO pay is around CN¥841k.

Chongqing Mas Sci.&Tech.Co.Ltd offered total compensation worth CN¥713k to its CEO in the year to December 2022. That comes in below the average for similar sized companies and seems pretty reasonable. 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.

Does Chongqing Mas Sci.&Tech.Co.Ltd Deserve A Spot On Your Watchlist?

One important encouraging feature of Chongqing Mas Sci.&Tech.Co.Ltd is that it is growing profits. The growth of EPS may be the eye-catching headline for Chongqing Mas Sci.&Tech.Co.Ltd, but there's more to bring joy for shareholders. Boasting both modest CEO pay and considerable insider ownership, you'd argue this one is worthy of the watchlist, at least. Another important measure of business quality not discussed here, is return on equity (ROE). Click on this link to see how Chongqing Mas Sci.&Tech.Co.Ltd shapes up to industry peers, when it comes to ROE.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of Chinese companies which have demonstrated growth backed by recent insider purchases.

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.