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Here's Why SINOPEC Engineering (Group) (HKG:2386) Has Caught The Eye Of Investors

Simply Wall St · 6d ago

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 currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in SINOPEC Engineering (Group) (HKG:2386). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

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SINOPEC Engineering (Group)'s Earnings Per Share Are Growing

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That makes EPS growth an attractive quality for any company. Over the last three years, SINOPEC Engineering (Group) has grown EPS by 6.0% per year. This may not be setting the world alight, but it does show that EPS is on the upwards trend.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. EBIT margins for SINOPEC Engineering (Group) remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 12% to CN¥67b. That's encouraging news for the company!

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.

earnings-and-revenue-history
SEHK:2386 Earnings and Revenue History January 5th 2026

Check out our latest analysis for SINOPEC Engineering (Group)

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of SINOPEC Engineering (Group)'s forecast profits?

Are SINOPEC Engineering (Group) Insiders Aligned With All Shareholders?

Prior to investment, it's always a good idea to check that the management team is paid reasonably. Pay levels around or below the median, can be a sign that shareholder interests are well considered. The median total compensation for CEOs of companies similar in size to SINOPEC Engineering (Group), with market caps between CN¥14b and CN¥45b, is around CN¥4.1m.

The CEO of SINOPEC Engineering (Group) only received CN¥1.2m in total compensation for the year ending December 2024. That's clearly well below average, so at a glance that arrangement seems generous to shareholders and points to a modest remuneration culture. 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 good governance, more generally.

Does SINOPEC Engineering (Group) Deserve A Spot On Your Watchlist?

One important encouraging feature of SINOPEC Engineering (Group) is that it is growing profits. To add to this, the modest CEO compensation should tell investors that the directors have an active interest in delivering the best for shareholders. So all in all SINOPEC Engineering (Group) is worthy at least considering for your watchlist. Still, you should learn about the 1 warning sign we've spotted with SINOPEC Engineering (Group).

Although SINOPEC Engineering (Group) 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.