Kunlun Energy Company Limited (HKG:135): Is It A Good Long Term Opportunity?
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Kunlun Energy Company Limited's (HKG:135) most recent earnings announcement in April 2019 confirmed that the business endured a slight headwind with earnings declining from CN¥4.8b to CN¥4.6b, a change of -2.6%. Below, I've laid out key growth figures on how market analysts perceive Kunlun Energy's earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Kunlun Energy
Market analysts' prospects for the coming year seems positive, with earnings growing by a robust 43%. This growth seems to continue into the following year with rates arriving at double digit 65% compared to today’s earnings, and finally hitting CN¥7.9b by 2022.
While it’s useful to be aware of the growth rate year by year relative to today’s figure, it may be more insightful to evaluate the rate at which the earnings are growing every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of Kunlun Energy's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 13%. This means that, we can anticipate Kunlun Energy will grow its earnings by 13% every year for the next couple of years.
Next Steps:
For Kunlun Energy, I've compiled three important aspects 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 135 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 135 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 135? 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.
