Does Aerospace Intelligent Manufacturing Technology (SZSE:300446) Deserve A Spot On Your Watchlist?

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. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

In contrast to all that, many investors prefer to focus on companies like Aerospace Intelligent Manufacturing Technology (SZSE:300446), 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 Aerospace Intelligent Manufacturing Technology with the means to add long-term value to shareholders.

How Fast Is Aerospace Intelligent Manufacturing Technology Growing Its Earnings Per Share?

Over the last three years, Aerospace Intelligent Manufacturing Technology 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. To the delight of shareholders, Aerospace Intelligent Manufacturing Technology's EPS soared from CN¥0.62 to CN¥0.94, over the last year. That's a impressive gain of 50%.

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. Aerospace Intelligent Manufacturing Technology maintained stable EBIT margins over the last year, all while growing revenue 33% to CN¥7.8b. That's a real positive.

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.

Check out our latest analysis for Aerospace Intelligent Manufacturing Technology

While profitability drives the upside, prudent investors always check the balance sheet, too.

Are Aerospace Intelligent Manufacturing Technology Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Aerospace Intelligent Manufacturing Technology shares worth a considerable sum. As a matter of fact, their holding is valued at CN¥163m. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 1.0% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable. A brief analysis of the CEO compensation suggests they are. For companies with market capitalisations between CN¥7.2b and CN¥23b, like Aerospace Intelligent Manufacturing Technology, the median CEO pay is around CN¥1.2m.

The CEO of Aerospace Intelligent Manufacturing Technology was paid just CN¥175k in total compensation for the year ending December 2023. This total may indicate that the CEO is sacrificing take home pay for performance-based benefits, ensuring that their motivations are synonymous with strong company results. 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. It can also be a sign of a culture of integrity, in a broader sense.

Does Aerospace Intelligent Manufacturing Technology Deserve A Spot On Your Watchlist?

For growth investors, Aerospace Intelligent Manufacturing Technology's raw rate of earnings growth is a beacon in the night. If you need more convincing beyond that EPS growth rate, don't forget about the reasonable remuneration and the high insider ownership. Everyone has their own preferences when it comes to investing but it definitely makes Aerospace Intelligent Manufacturing Technology look rather interesting indeed. Of course, identifying quality businesses is only half the battle; investors need to know whether the stock is undervalued. So you might want to consider this free discounted cashflow valuation of Aerospace Intelligent Manufacturing Technology.

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 significant insider holdings.

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.