After Minth Group Limited's (HKG:425) earnings announcement in December 2018, the consensus outlook from analysts appear in-line with historical trends, with earnings growth rate expected to be 14% in the upcoming year, relative to the past five-year average earnings growth of 15% per year. Presently, with latest-twelve-month earnings at CN¥1.7b, we should see this growing to CN¥1.9b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will Minth Group perform in the near future?
Over the next three years, it seems the consensus view of the 21 analysts covering 425 is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 14% based on the most recent earnings level of CN¥1.7b to the final forecast of CN¥2.5b by 2022. This leads to an EPS of CN¥2.19 in the final year of projections relative to the current EPS of CN¥1.45. Margins are currently sitting at 13%, which is expected to expand to 15% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Minth Group, I've compiled three important factors you should look at:
- 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.
- Valuation: What is Minth Group 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 Minth Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Minth 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!
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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.