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How Do Analysts See China Unicom (Hong Kong) Limited (HKG:762) Performing In The Year Ahead?

Simply Wall St

Based on China Unicom (Hong Kong) Limited's (HKG:762) earnings update in March 2019, the consensus outlook from analysts appear fairly confident, as a 34% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -21%. Currently with trailing-twelve-month earnings of CN¥10b, we can expect this to reach CN¥14b by 2020. Below is a brief commentary on the longer term outlook the market has for China Unicom (Hong Kong). Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for China Unicom (Hong Kong)

Can we expect China Unicom (Hong Kong) to keep growing?

The longer term expectations from the 23 analysts of 762 is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of 762's earnings growth over these next few years.

SEHK:762 Past and Future Earnings, August 13th 2019

From the current net income level of CN¥10b and the final forecast of CN¥23b by 2022, the annual rate of growth for 762’s earnings is 23%. This leads to an EPS of CN¥0.79 in the final year of projections relative to the current EPS of CN¥0.33. With a current profit margin of 3.5%, this movement will result in a margin of 6.6% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For China Unicom (Hong Kong), I've compiled three pertinent aspects you should further examine:

  1. 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.
  2. Valuation: What is China Unicom (Hong Kong) 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 Unicom (Hong Kong) is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Unicom (Hong Kong)? 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 editorial-team@simplywallst.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.