With EPS Growth And More, Tianjin Yiyi Hygiene ProductsLtd (SZSE:001206) 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. 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.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Tianjin Yiyi Hygiene ProductsLtd (SZSE:001206). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Tianjin Yiyi Hygiene ProductsLtd with the means to add long-term value to shareholders.

View our latest analysis for Tianjin Yiyi Hygiene ProductsLtd

How Fast Is Tianjin Yiyi Hygiene ProductsLtd Growing Its Earnings Per Share?

Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Tianjin Yiyi Hygiene ProductsLtd's EPS shot up from CN¥0.59 to CN¥0.91; a result that's bound to keep shareholders happy. That's a commendable gain of 54%.

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. Tianjin Yiyi Hygiene ProductsLtd shareholders can take confidence from the fact that EBIT margins are up from 8.7% to 13%, and revenue is growing. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

Fortunately, we've got access to analyst forecasts of Tianjin Yiyi Hygiene ProductsLtd's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Tianjin Yiyi Hygiene ProductsLtd Insiders Aligned With All Shareholders?

Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there's less of a probability in a sudden sell-off that would impact the share price. So we're pleased to report that Tianjin Yiyi Hygiene ProductsLtd insiders own a meaningful share of the business. In fact, they own 57% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. at the current share price. That means they have plenty of their own capital riding on the performance of the business!

Is Tianjin Yiyi Hygiene ProductsLtd Worth Keeping An Eye On?

For growth investors, Tianjin Yiyi Hygiene ProductsLtd's raw rate of earnings growth is a beacon in the night. This EPS growth rate is something the company should be proud of, and so it's no surprise that insiders are holding on to a considerable chunk of shares. On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Tianjin Yiyi Hygiene ProductsLtd that you should be aware of.

Although Tianjin Yiyi Hygiene ProductsLtd 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.