With EPS Growth And More, Beijing Yanjing BreweryLtd (SZSE:000729) Makes An Interesting Case

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 Beijing Yanjing BreweryLtd (SZSE:000729). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Beijing Yanjing BreweryLtd with the means to add long-term value to shareholders.

View our latest analysis for Beijing Yanjing BreweryLtd

How Fast Is Beijing Yanjing BreweryLtd Growing Its Earnings Per Share?

Over the last three years, Beijing Yanjing BreweryLtd has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Outstandingly, Beijing Yanjing BreweryLtd's EPS shot from CN¥0.12 to CN¥0.23, over the last year. It's not often a company can achieve year-on-year growth of 88%.

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. Our analysis has highlighted that Beijing Yanjing BreweryLtd's revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. Beijing Yanjing BreweryLtd shareholders can take confidence from the fact that EBIT margins are up from 2.8% to 6.0%, and revenue is growing. Both of which are great metrics to check off for potential growth.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

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 Beijing Yanjing BreweryLtd?

Are Beijing Yanjing BreweryLtd 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. The median total compensation for CEOs of companies similar in size to Beijing Yanjing BreweryLtd, with market caps between CN¥14b and CN¥46b, is around CN¥1.5m.

Beijing Yanjing BreweryLtd's CEO took home a total compensation package of CN¥645k in the year prior to December 2022. First impressions seem to indicate a compensation policy that is favourable to shareholders. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of a culture of integrity, in a broader sense.

Does Beijing Yanjing BreweryLtd Deserve A Spot On Your Watchlist?

Beijing Yanjing BreweryLtd's earnings per share growth have been climbing higher at an appreciable rate. Such fast EPS growth prompts the question: has the business reached an inflection point? At the same time the reasonable CEO compensation reflects well on the board of directors. So Beijing Yanjing BreweryLtd looks like it could be a good quality growth stock, at first glance. That's worth watching. You still need to take note of risks, for example - Beijing Yanjing BreweryLtd has 1 warning sign we think you should be aware of.

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.