Here's Why I Think BII Railway Transportation Technology Holdings (HKG:1522) Might Deserve Your Attention Today

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. 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.

In contrast to all that, I prefer to spend time on companies like BII Railway Transportation Technology Holdings (HKG:1522), which has not only revenues, but also profits. Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

Check out our latest analysis for BII Railway Transportation Technology Holdings

How Fast Is BII Railway Transportation Technology Holdings Growing Its Earnings Per Share?

In the last three years BII Railway Transportation Technology Holdings's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Like a firecracker arcing through the night sky, BII Railway Transportation Technology Holdings's EPS shot from HK$0.046 to HK$0.08, over the last year. Year on year growth of 74% is certainly a sight to behold. The best case scenario? That the business has hit a true inflection point.

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. BII Railway Transportation Technology Holdings shareholders can take confidence from the fact that EBIT margins are up from 8.1% to 16%, 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. To see the actual numbers, click on the chart.

Since BII Railway Transportation Technology Holdings is no giant, with a market capitalization of HK$1.4b, so you should definitely check its cash and debt before getting too excited about its prospects.

Are BII Railway Transportation Technology Holdings Insiders Aligned With All Shareholders?

I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that BII Railway Transportation Technology Holdings insiders have a significant amount of capital invested in the stock. Indeed, they hold HK$165m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 12% of the company, demonstrating a degree of high-level alignment with shareholders.

Is BII Railway Transportation Technology Holdings Worth Keeping An Eye On?

BII Railway Transportation Technology Holdings's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. That EPS growth certainly has my attention, and the large insider ownership only serves to further stoke my interest. At times fast EPS growth is a sign the business has reached an inflection point; and I do like those. So yes, on this short analysis I do think it's worth considering BII Railway Transportation Technology Holdings for a spot on your watchlist. Even so, be aware that BII Railway Transportation Technology Holdings is showing 2 warning signs in our investment analysis , you should know about...

Although BII Railway Transportation Technology Holdings 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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This article by Simply Wall St is general in nature. 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.
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