Advertisement
U.S. markets close in 2 hours 11 minutes
  • S&P 500

    5,252.82
    +4.33 (+0.08%)
     
  • Dow 30

    39,780.95
    +20.87 (+0.05%)
     
  • Nasdaq

    16,382.57
    -16.95 (-0.10%)
     
  • Russell 2000

    2,124.43
    +10.09 (+0.48%)
     
  • Crude Oil

    82.95
    +1.60 (+1.97%)
     
  • Gold

    2,239.70
    +27.00 (+1.22%)
     
  • Silver

    24.93
    +0.18 (+0.72%)
     
  • EUR/USD

    1.0800
    -0.0029 (-0.27%)
     
  • 10-Yr Bond

    4.2080
    +0.0120 (+0.29%)
     
  • GBP/USD

    1.2626
    -0.0012 (-0.09%)
     
  • USD/JPY

    151.3760
    +0.1300 (+0.09%)
     
  • Bitcoin USD

    70,783.47
    +1,743.84 (+2.53%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

China Telecom Corporation Limited (HKG:728): What We Can Expect From This Growth Stock

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Since China Telecom Corporation Limited (HKG:728) released its earnings in September 2018, analysts seem cautiously optimistic, with profits predicted to increase by 13% next year compared with the past 5-year average growth rate of 1.7%. Presently, with latest-twelve-month earnings at CN¥19b, we should see this growing to CN¥21b by 2020. Below is a brief commentary around China Telecom’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for China Telecom

Can we expect China Telecom to keep growing?

The longer term expectations from the 25 analysts of 728 is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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 728’s earnings growth over these next few years.

SEHK:728 Future Profit February 16th 19
SEHK:728 Future Profit February 16th 19

By 2022, 728’s earnings should reach CN¥30b, from current levels of CN¥19b, resulting in an annual growth rate of 13%. EPS reaches CN¥0.38 in the final year of forecast compared to the current CN¥0.23 EPS today. Margins are currently sitting at 5.1%, which is expected to expand to 7.0% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For China Telecom, I’ve put together three pertinent aspects you should further research:

  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 Telecom 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 Telecom is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Telecom? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Advertisement