We Ran A Stock Scan For Earnings Growth And Shenzhou International Group Holdings (HKG:2313) Passed With Ease

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Shenzhou International Group Holdings (HKG:2313). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Shenzhou International Group Holdings with the means to add long-term value to shareholders.

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How Fast Is Shenzhou International Group Holdings Growing?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Impressively, Shenzhou International Group Holdings has grown EPS by 23% per year, compound, in the last three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.

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. Shenzhou International Group Holdings maintained stable EBIT margins over the last year, all while growing revenue 16% to CN¥31b. That's encouraging news for the company!

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

View our latest analysis for Shenzhou International Group Holdings

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Shenzhou International Group Holdings?

Are Shenzhou International Group Holdings Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

One gleaming positive for Shenzhou International Group Holdings, in the last year, is that a certain insider has buying shares with ample enthusiasm. In one fell swoop, Executive Chairman of the Board Jianrong Ma, spent HK$15m, at a price of HK$47.24 per share. Big insider buys like that are a rarity and should prompt discussion on the merits of the business.

These recent buys aren't the only encouraging sign for shareholders, as a look at the shareholder registry for Shenzhou International Group Holdings will reveal that insiders own a significant piece of the pie. In fact, they own 42% of the shares, making insiders a very influential shareholder group. This should be a welcoming sign for investors because it suggests that the people making the decisions are also impacted by their choices. This insider holding amounts to This is an incredible endorsement from them.

Shareholders have more to smile about than just insiders adding more shares to their already sizeable holdings. That's because Shenzhou International Group Holdings' CEO, Renhe Ma, is paid at a relatively modest level when compared to other CEOs for companies of this size. Our analysis has discovered that the median total compensation for the CEOs of companies like Shenzhou International Group Holdings, with market caps over CN¥56b, is about CN¥5.4m.

The Shenzhou International Group Holdings CEO received CN¥4.6m in compensation for the year ending December 2024. That seems pretty reasonable, especially given it's below the median for similar 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 good governance, more generally.

Is Shenzhou International Group Holdings Worth Keeping An Eye On?

If you believe that share price follows earnings per share you should definitely be delving further into Shenzhou International Group Holdings' strong EPS growth. On top of that, insiders own a significant piece of the pie when it comes to the company's stock, and one has been buying more. So it's fair to say that this stock may well deserve a spot on your watchlist. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Shenzhou International Group Holdings , and understanding it should be part of your investment process.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Shenzhou International Group Holdings, you'll probably love this curated collection of companies in HK that have an attractive valuation alongside insider buying in the last three months.

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.