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Kaisa Group Holdings Ltd. (HKG:1638): Will The Growth Last?

Simply Wall St

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Since Kaisa Group Holdings Ltd. (HKG:1638) released its earnings in December 2018, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 38% in the upcoming year relative to the past 5-year average growth rate of 27%. Presently, with latest-twelve-month earnings at CN¥2.8b, we should see this growing to CN¥3.8b by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Kaisa Group Holdings in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Kaisa Group Holdings

How is Kaisa Group Holdings going to perform in the near future?

The longer term view from the 1 analysts covering 1638 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 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.

SEHK:1638 Past and Future Earnings, July 21st 2019

This results in an annual growth rate of 28% based on the most recent earnings level of CN¥2.8b to the final forecast of CN¥6.5b by 2022. EPS reaches CN¥1.07 in the final year of forecast compared to the current CN¥0.45 EPS today. Margins are currently sitting at 7.1%, approximately the same as previous years. With analysts forecasting revenue growth of 1.32745 and 1638's net income growth expected to roughly track that, this company may add value for shareholders over time.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Kaisa Group Holdings, I've put together three key 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 Kaisa Group Holdings 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 Kaisa Group Holdings is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kaisa Group Holdings? 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.