The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. 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. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
In contrast to all that, many investors prefer to focus on companies like CITIC Heavy Industries (SHSE:601608), 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 CITIC Heavy Industries with the means to add long-term value to shareholders.
How Fast Is CITIC Heavy Industries Growing?
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That makes EPS growth an attractive quality for any company. Shareholders will be happy to know that CITIC Heavy Industries' EPS has grown 25% each year, compound, over three years. So it's not surprising to see the company trades on a very high multiple of (past) earnings.
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. The good news is that CITIC Heavy Industries is growing revenues, and EBIT margins improved by 3.8 percentage points to 3.1%, over the last year. Ticking those two boxes is a good sign of growth, in our book.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
While profitability drives the upside, prudent investors always check the balance sheet, too.
Are CITIC Heavy Industries Insiders Aligned With All Shareholders?
As a general rule, it's worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. For companies with market capitalisations between CN¥14b and CN¥46b, like CITIC Heavy Industries, the median CEO pay is around CN¥1.6m.
CITIC Heavy Industries' CEO took home a total compensation package worth CN¥843k in the year leading up to December 2022. That seems pretty reasonable, especially given it's below the median for similar sized companies. 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.
Is CITIC Heavy Industries Worth Keeping An Eye On?
For growth investors, CITIC Heavy Industries' raw rate of earnings growth is a beacon in the night. With swiftly growing earnings, the best days may still be to come, and the modest CEO pay suggests the company is careful with cash. Based on these factors, this stock may well deserve a spot on your watchlist, or even a little further research. It is worth noting though that we have found 1 warning sign for CITIC Heavy Industries that you need to take into consideration.
Although CITIC Heavy Industries certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of Chinese companies that not only boast of strong growth but have also seen recent insider buying..
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
多くの投資家は、利益だけでなく、収益があるCITIC Heavy Industries (SHSE: 601608)などの企業に焦点を当てることを好むのに対して、これに対して多くの投資家は、収益だけでなく、収益も持つCITIC Heavy Industries(SHSE:601608)のような企業に焦点を当てることを好む。市場によって公正に評価されているとしても、一貫した利益を生み出すことは、株主に長期的な価値を付与する手段を提供し続けると、投資家は同意することになります。
CITIC Heavy Industriesの成長速度はどの程度ですか?
EPS成長が十分に長い期間続けば、株価も最終的に追随するはずです。これにより、EPS成長は、どの企業にとっても魅力的な品質となります。株主は、CITIC Heavy IndustriesのEPSが過去3年間で25%の年率で成長したことを知って喜ぶでしょう。したがって、この企業が(過去の)利益の非常に高い倍数で取引されているのは驚くことではありません。
企業の成長をダブルチェックする方法の1つは、その売上高、利益の前利息・税(EBIT)マージンの変化を見ることです。良いニュースは、CITIC Heavy Industriesが売上高を伸ばし、前年比3.8%ポイント改善し、3.1%になったということです。我々の書籍では、これらの2つのボックスにチェックを入れることは、成長の良いサインです。
一般的に、役員の報酬がいくらかを考慮する価値があります。市場価値がCN¥14bからCN¥46bの企業、例えばCITIC Heavy Industriesの場合、CEOの中央値の報酬は約CN¥1.6mです。
CITIC Heavy IndustriesのCEOは、2022年12月までに、CN¥843k相当の報酬パッケージを受け取りました。同程度の企業の中央値を下回っているため、それはかなり合理的に思われます。CEOの報酬は、考慮すべき最も重要な側面ではありませんが、それが合理的であるとき、指導者が株主の利益を考慮していることに少し自信を持たせるためのものであり、広義には誠実さの文化の兆候になるかもしれません。
CITIC Heavy Industriesを見ておく価値はありますか?
成長投資家にとって、CITIC Heavy Industriesの純利益成長率は夜の灯台です。急速に増える収益により、最高の日はまだ来ているかもしれず、控えめなCEO報酬は、会社が現金を慎重に扱っていることを示唆しています。これらの要因に基づいて、この株はあなたのウォッチリストに値するかもしれません。1つの警告サインがあることを考慮する必要があることに留意することも価値があります。
CITIC Heavy Industriesは確かに良い見込みですが、社内で株式を買い増すことができれば、より多くの投資家の関心を引くかもしれません。株式を内部で購入している会社を見たい場合は、この厳選された中国企業の手動選択を確認してください。これらの企業は強力な成長だけでなく、最近の内部者取引も誇っています。