I Ran A Stock Scan For Earnings Growth And China Tianrui Automotive Interiors (HKG:6162) Passed With Ease

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. 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.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in China Tianrui Automotive Interiors (HKG:6162). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

View our latest analysis for China Tianrui Automotive Interiors

How Fast Is China Tianrui Automotive Interiors Growing Its Earnings Per Share?

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So EPS growth can certainly encourage an investor to take note of a stock. Like a falcon taking flight, China Tianrui Automotive Interiors's EPS soared from CN¥0.021 to CN¥0.027, over the last year. That's a commendable gain of 27%.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. China Tianrui Automotive Interiors shareholders can take confidence from the fact that EBIT margins are up from 18% to 21%, and revenue is growing. That's great to see, on both counts.

The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.

Since China Tianrui Automotive Interiors is no giant, with a market capitalization of HK$260m, so you should definitely check its cash and debt before getting too excited about its prospects.

Are China Tianrui Automotive Interiors Insiders Aligned With All Shareholders?

I always like to check up on CEO compensation, because I think that reasonable pay levels, around or below the median, can be a sign that shareholder interests are well considered. For companies with market capitalizations under CN¥1.3b, like China Tianrui Automotive Interiors, the median CEO pay is around CN¥1.5m.

The CEO of China Tianrui Automotive Interiors was paid just CN¥232k in total compensation for the year ending . You could consider this pay as somewhat symbolic, which suggests the CEO does not need a lot of compensation to stay motivated. While the level of CEO compensation isn't a huge factor in my view of the company, 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.

Should You Add China Tianrui Automotive Interiors To Your Watchlist?

You can't deny that China Tianrui Automotive Interiors has grown its earnings per share at a very impressive rate. That's attractive. The fast growth bodes well while the very reasonable CEO pay assists builds some confidence in the board. So I'd venture it may well deserve a spot on your watchlist, or even a little further research. What about risks? Every company has them, and we've spotted 3 warning signs for China Tianrui Automotive Interiors (of which 2 are a bit unpleasant!) you should know about.

Although China Tianrui Automotive Interiors certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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