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Café de Coral Holdings Limited (HKG:341): Poised For Long Term Success?

Simply Wall St

After Café de Coral Holdings Limited's (HKG:341) earnings announcement in March 2019, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 5.9% in the upcoming year against the past 5-year average growth rate of -5.2%. Presently, with latest-twelve-month earnings at HK$590m, we should see this growing to HK$625m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Café de Coral Holdings in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Café de Coral Holdings

How is Café de Coral Holdings going to perform in the near future?

The longer term view from the 6 analysts covering 341 is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for 341, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

SEHK:341 Past and Future Earnings, August 16th 2019

By 2022, 341's earnings should reach HK$725m, from current levels of HK$590m, resulting in an annual growth rate of 6.6%. This leads to an EPS of HK$1.24 in the final year of projections relative to the current EPS of HK$1.02. With a current profit margin of 6.9%, this movement will result in a margin of 7.2% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Café de Coral Holdings, I've put together three important factors you should look at:

  1. Valuation: What is Café de Coral 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 Café de Coral Holdings is currently mispriced by the market.
  2. Future Earnings: How does Café de Coral Holdings's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Café de Coral 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 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.