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What Should Investors Know About The Future Of Guangdong Kanghua Healthcare Co., Ltd.'s (HKG:3689)?

Simply Wall St

As Guangdong Kanghua Healthcare Co., Ltd. (HKG:3689) released its earnings announcement on 31 December 2018, analysts seem cautiously optimistic, with profits predicted to increase by 22% next year compared with the past 5-year average growth rate of 10%. With trailing-twelve-month net income at current levels of CN¥168m, we should see this rise to CN¥205m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Guangdong Kanghua Healthcare in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

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View our latest analysis for Guangdong Kanghua Healthcare

How is Guangdong Kanghua Healthcare going to perform in the near future?

Longer term expectations from the 1 analysts covering 3689’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of 3689'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.

SEHK:3689 Past and Future Earnings, May 22nd 2019

By 2022, 3689's earnings should reach CN¥273m, from current levels of CN¥168m, resulting in an annual growth rate of 13%. This leads to an EPS of CN¥0.82 in the final year of projections relative to the current EPS of CN¥0.50. Margins are currently sitting at 10%, which is expected to expand to 11% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Guangdong Kanghua Healthcare, I've put together three essential factors you should further examine:

  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 Guangdong Kanghua Healthcare 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 Guangdong Kanghua Healthcare is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Guangdong Kanghua Healthcare? 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.