On 31 December 2018, CITIC Telecom International Holdings Limited (HKG:1883) released its earnings update. Generally, analysts seem fairly confident, with earnings expected to grow by 6.8% in the upcoming year compared with the past 5-year average growth rate of 3.7%. With trailing-twelve-month net income at current levels of HK$951m, we should see this rise to HK$1.0b in 2020. Below is a brief commentary around CITIC Telecom International Holdings's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect CITIC Telecom International Holdings to keep growing?
The view from 4 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of 1883's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 6.9% based on the most recent earnings level of HK$951m to the final forecast of HK$1.2b by 2022. This leads to an EPS of HK$0.33 in the final year of projections relative to the current EPS of HK$0.27. In 2022, 1883's profit margin will have expanded from 10% to 12%.
Future outlook is only one aspect when you're building an investment case for a stock. For CITIC Telecom International Holdings, there are three important aspects you should further examine:
- 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 CITIC Telecom International 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 CITIC Telecom International Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CITIC Telecom International 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.