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In December 2018, China Dongxiang (Group) Co., Ltd. (HKG:3818) released its earnings update. Generally, analysts seem extremely confident, with earnings expected to grow by a high double-digit of 98% in the upcoming year, compared with the past 5-year average growth rate of 5.3%. With trailing-twelve-month net income at current levels of CN¥315m, we should see this rise to CN¥623m in 2020. Below is a brief commentary around China Dongxiang (Group)'s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Exciting times ahead?
The 3 analysts covering 3818 view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for 3818, 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.
This results in an annual growth rate of 24% based on the most recent earnings level of CN¥315m to the final forecast of CN¥713m by 2022. EPS reaches CN¥0.12 in the final year of forecast compared to the current CN¥0.054 EPS today. With a current profit margin of 18%, this movement will result in a margin of 32% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For China Dongxiang (Group), I've compiled three relevant 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.
- Future Earnings: How does China Dongxiang (Group)'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.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Dongxiang (Group)? 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.