In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
CIMC Enric Holdings Limited's (HKG:3899) latest earnings update in April 2019 showed that the business gained from a strong tailwind, eventuating to a high double-digit earnings growth of 87%. Investors may find it useful to understand how market analysts perceive CIMC Enric Holdings's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for CIMC Enric Holdings
Analysts' expectations for next year seems positive, with earnings growing by a robust 22%. This growth seems to continue into the following year with rates reaching double digit 41% compared to today’s earnings, and finally hitting CN¥1.3b by 2022.
While it is useful to understand the rate of growth year by year relative to today’s figure, it may be more insightful to analyze the rate at which the company is growing every year, on average. The benefit of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of CIMC Enric Holdings's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 16%. This means that, we can expect CIMC Enric Holdings will grow its earnings by 16% every year for the next couple of years.
Next Steps:
For CIMC Enric Holdings, there are three relevant 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 3899 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 3899 is currently mispriced by the market.
-
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 3899? 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.