U.S. Markets closed

Haier Electronics Group Co., Ltd. (HKG:1169): What Are The Future Prospects?

Simply Wall St

In April 2019, Haier Electronics Group Co., Ltd. (HKG:1169) released its latest earnings announcement, which indicated that the company benefited from a robust tailwind, eventuating to a double-digit earnings growth of 14%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Haier Electronics Group's earnings growth outlook over the next few 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 Haier Electronics Group

Market analysts' consensus outlook for this coming year seems rather subdued, with earnings expanding by a single digit 9.5%. The growth outlook in the following year seems much more optimistic with rates arriving at double digit 22% compared to today’s earnings, and finally hitting CN¥4.9b by 2022.

SEHK:1169 Past and Future Earnings, August 20th 2019

Although it’s informative knowing the growth rate year by year relative to today’s figure, it may be more valuable evaluating the rate at which the company is moving on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Haier Electronics Group's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended 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 7.1%. This means, we can assume Haier Electronics Group will grow its earnings by 7.1% every year for the next few years.

Next Steps:

For Haier Electronics Group, I've compiled three key factors 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 1169 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 1169 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1169? 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.