If EPS Growth Is Important To You, Zhejiang Zhaolong Interconnect TechnologyLtd (SZSE:300913) 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.' While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Zhejiang Zhaolong Interconnect TechnologyLtd (SZSE:300913). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

View our latest analysis for Zhejiang Zhaolong Interconnect TechnologyLtd

How Quickly Is Zhejiang Zhaolong Interconnect TechnologyLtd Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Zhejiang Zhaolong Interconnect TechnologyLtd managed to grow EPS by 10% per year, over three years. That's a pretty good rate, if the company can sustain it.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. It's noted that Zhejiang Zhaolong Interconnect TechnologyLtd's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. While we note Zhejiang Zhaolong Interconnect TechnologyLtd achieved similar EBIT margins to last year, revenue grew by a solid 17% to CN¥1.8b. That's encouraging news for the company!

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.

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Zhejiang Zhaolong Interconnect TechnologyLtd?

Are Zhejiang Zhaolong Interconnect TechnologyLtd Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Zhejiang Zhaolong Interconnect TechnologyLtd followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. Notably, they have an enviable stake in the company, worth CN¥3.3b. Coming in at 24% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. Looking very optimistic for investors.

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. Our analysis has discovered that the median total compensation for the CEOs of companies like Zhejiang Zhaolong Interconnect TechnologyLtd with market caps between CN¥7.3b and CN¥23b is about CN¥1.2m.

The CEO of Zhejiang Zhaolong Interconnect TechnologyLtd only received CN¥440k in total compensation for the year ending December 2023. That's clearly well below average, so at a glance that arrangement seems generous to shareholders and points to a modest remuneration culture. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.

Does Zhejiang Zhaolong Interconnect TechnologyLtd Deserve A Spot On Your Watchlist?

As previously touched on, Zhejiang Zhaolong Interconnect TechnologyLtd is a growing business, which is encouraging. The fact that EPS is growing is a genuine positive for Zhejiang Zhaolong Interconnect TechnologyLtd, but the pleasant picture gets better than that. Boasting both modest CEO pay and considerable insider ownership, you'd argue this one is worthy of the watchlist, at least. We should say that we've discovered 2 warning signs for Zhejiang Zhaolong Interconnect TechnologyLtd (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Although Zhejiang Zhaolong Interconnect TechnologyLtd 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.