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What Do Analysts Think About CapitaLand Retail China Trust’s (SGX:AU8U) Earnings Trend?

In December 2017, CapitaLand Retail China Trust (SGX:AU8U) released its most recent earnings announcement, which confirmed that the company benefited from a robust tailwind, eventuating to a double-digit earnings growth of 35.72%. Below is a brief commentary on my key takeaways on how market analysts view CapitaLand Retail China Trust’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. View our latest analysis for CapitaLand Retail China Trust

Analysts’ outlook for the upcoming year seems pessimistic, with earnings falling by a double-digit -33.18%. In the next couple of years, earnings are predicted to continue to be below today’s level, with a decline of -23.77% in 2020, eventually reaching S$110.30M in 2021.

SGX:AU8U Future Profit Apr 16th 18
SGX:AU8U Future Profit Apr 16th 18

Even though it’s helpful to understand the growth year by year relative to today’s value, it may be more valuable analyzing the rate at which the company is rising or falling every year, on average. The benefit of this method is that we can get a better picture of the direction of CapitaLand Retail China Trust’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -5.19%. This means that, we can assume CapitaLand Retail China Trust will chip away at a rate of -5.19% every year for the next couple of years.

Next Steps:

For CapitaLand Retail China Trust, I’ve put together three essential factors 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 AU8U 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 AU8U is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AU8U? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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