After China Resources Power Holdings Company Limited's (HKG:836) earnings announcement in December 2018, analysts seem extremely confident, as a 89% rise in profits is expected in the upcoming year, relative to the historical 5-year average growth rate of -20%. Presently, with latest-twelve-month earnings at HK$4.0b, we should see this growing to HK$7.5b by 2020. Below is a brief commentary on the longer term outlook the market has for China Resources Power Holdings. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will China Resources Power Holdings perform in the near future?
Over the next three years, it seems the consensus view of the 12 analysts covering 836 is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, 836's earnings should reach HK$9.8b, from current levels of HK$4.0b, resulting in an annual growth rate of 26%. EPS reaches HK$1.97 in the final year of forecast compared to the current HK$0.83 EPS today. In 2022, 836's profit margin will have expanded from 5.1% to 12%.
Future outlook is only one aspect when you're building an investment case for a stock. For China Resources Power Holdings, there are three essential aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is China Resources Power Holdings worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether China Resources Power Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Resources Power Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.