In December 2018, China Resources Medical Holdings Company Limited (HKG:1515) released its earnings update. Generally, it seems that analyst forecasts are fairly pessimistic, as a 5.2% fall in profits is expected in the upcoming year. Though this is still an improvement on its past 5-year earnings growth rate of -11%, on average. With trailing-twelve-month net income at current levels of CN¥431m, the consensus growth rate suggests that earnings will decline to CN¥408m by 2020. Below is a brief commentary on the longer term outlook the market has for China Resources Medical Holdings. For those interested in more of an analysis of the company, you can research its fundamentals here.
How is China Resources Medical Holdings going to perform in the near future?
The view from 6 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for 1515, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 3.3% based on the most recent earnings level of CN¥431m to the final forecast of CN¥462m by 2022. This leads to an EPS of CN¥0.35 in the final year of projections relative to the current EPS of CN¥0.34. By the end of 2022, analysts are expecting earnings to outpace revenue, and margins to expand from the current 21% to 21%.
Future outlook is only one aspect when you're building an investment case for a stock. For China Resources Medical Holdings, I've put together three key factors you should further examine:
- 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 China Resources Medical 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 China Resources Medical Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Resources Medical 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 firstname.lastname@example.org. 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.