In December 2018, Hebei Construction Group Corporation Limited (HKG:1727) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 9.4% in the upcoming year compared with the higher past 5-year average growth rate of 20%. With trailing-twelve-month net income at current levels of CN¥1.1b, we should see this rise to CN¥1.2b in 2020. Below is a brief commentary on the longer term outlook the market has for Hebei Construction Group. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Hebei Construction Group in the longer term?
The 1 analysts covering 1727 view its longer term outlook with a 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 1727'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.
From the current net income level of CN¥1.1b and the final forecast of CN¥1.8b by 2022, the annual rate of growth for 1727’s earnings is 16%. EPS reaches CN¥1.02 in the final year of forecast compared to the current CN¥0.63 EPS today. In 2022, 1727's profit margin will have expanded from 2.4% to 2.6%.
Future outlook is only one aspect when you're building an investment case for a stock. For Hebei Construction Group, I've put together three essential factors 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 Hebei Construction 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 Hebei Construction Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Hebei Construction 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!
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.