Is Now The Time To Put Hangzhou SF Intra-city Industrial (HKG:9699) 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 are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Hangzhou SF Intra-city Industrial (HKG:9699). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

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How Fast Is Hangzhou SF Intra-city Industrial Growing Its Earnings Per Share?

In the last three years Hangzhou SF Intra-city Industrial's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. Thus, it makes sense to focus on more recent growth rates, instead. Impressively, Hangzhou SF Intra-city Industrial's EPS catapulted from CN¥0.07 to CN¥0.14, over the last year. It's not often a company can achieve year-on-year growth of 108%. The best case scenario? That the business has hit a true inflection point.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for Hangzhou SF Intra-city Industrial remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 27% to CN¥16b. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

See our latest analysis for Hangzhou SF Intra-city Industrial

Fortunately, we've got access to analyst forecasts of Hangzhou SF Intra-city Industrial's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Hangzhou SF Intra-city Industrial 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 Hangzhou SF Intra-city Industrial shares worth a considerable sum. As a matter of fact, their holding is valued at CN¥147m. This considerable investment should help drive long-term value in the business. Despite being just 1.0% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

It's good to see that insiders are invested in the company, but are remuneration levels reasonable? Our quick analysis into CEO remuneration would seem to indicate they are. The median total compensation for CEOs of companies similar in size to Hangzhou SF Intra-city Industrial, with market caps between CN¥7.2b and CN¥23b, is around CN¥3.4m.

Hangzhou SF Intra-city Industrial offered total compensation worth CN¥2.4m to its CEO in the year to December 2024. That is actually below the median for CEO's of similarly sized companies. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of a culture of integrity, in a broader sense.

Should You Add Hangzhou SF Intra-city Industrial To Your Watchlist?

Hangzhou SF Intra-city Industrial's earnings per share have been soaring, with growth rates sky high. The sweetener is that insiders have a mountain of stock, and the CEO remuneration is quite reasonable. The sharp increase in earnings could signal good business momentum. Hangzhou SF Intra-city Industrial is certainly doing some things right and is well worth investigating. It is worth noting though that we have found 1 warning sign for Hangzhou SF Intra-city Industrial that you need to take into consideration.

Although Hangzhou SF Intra-city Industrial 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 Hong Kong 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.