Based on Precision Tsugami (China) Corporation Limited's (HKG:1651) recently announced earnings update on 31 March 2019, analyst consensus outlook appear pessimistic, as a 2.7% fall in profits is expected in the upcoming year compared with the past 5-year average growth rate of 30%. Currently with a trailing-twelve-month profit of CN¥368m, the consensus growth rate suggests that earnings will drop to CN¥358m by 2020. Below is a brief commentary on the longer term outlook the market has for Precision Tsugami (China). For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Precision Tsugami (China) to keep growing?
The longer term view from the 5 analysts covering 1651 is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of 1651'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.
This results in an annual growth rate of 11% based on the most recent earnings level of CN¥368m to the final forecast of CN¥476m by 2022. This leads to an EPS of CN¥1.25 in the final year of projections relative to the current EPS of CN¥0.96. However, the near term margins may change heading into 2022, from the current levels of 13% to 12%.
Future outlook is only one aspect when you're building an investment case for a stock. For Precision Tsugami (China), I've put together three key aspects you should further research:
- 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 Precision Tsugami (China) 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 Precision Tsugami (China) is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Precision Tsugami (China)? 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.