Xinyi Glass Holdings Limited's (HKG:868) most recent earnings update in April 2019 revealed that the company gained from a small tailwind, eventuating to a single-digit earnings growth of 5.6%. Below, I've laid out key growth figures on how market analysts view Xinyi Glass Holdings's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts' outlook for the coming year seems rather subdued, with earnings expanding by a single digit 1.0%. The growth outlook in the following year seems much more positive with rates arriving at double digit 16% compared to today’s earnings, and finally hitting HK$5.3b by 2022.
Even though it is useful to understand the growth rate each year relative to today’s level, it may be more insightful estimating the rate at which the business is moving every year, on average. The pro of this technique is that we can get a bigger picture of the direction of Xinyi Glass Holdings'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 8.1%. This means, we can presume Xinyi Glass Holdings will grow its earnings by 8.1% every year for the next couple of years.
For Xinyi Glass Holdings, I've compiled three fundamental aspects 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 868 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 868 is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 868? 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.