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The most recent earnings update Sinopec Kantons Holdings Limited’s (SEHK:934) released in December 2017 indicated that the business benefited from a strong tailwind, leading to a double-digit earnings growth of 20.16%. Below, I’ve laid out key numbers on how market analysts predict Sinopec Kantons 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. Check out our latest analysis for Sinopec Kantons Holdings
Market analysts’ consensus outlook for the coming year seems positive, with earnings climbing by a robust 19.81%. This growth seems to continue into the following year with rates reaching double digit 38.29% compared to today’s earnings, and finally hitting HK$1.82B by 2021.
Although it’s informative understanding the growth year by year relative to today’s level, it may be more insightful determining the rate at which the earnings are moving every year, on average. The advantage of this approach is that we can get a better picture of the direction of Sinopec Kantons Holdings’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 13.64%. This means, we can expect Sinopec Kantons Holdings will grow its earnings by 13.64% every year for the next few years.
Next Steps:
For Sinopec Kantons Holdings, I’ve compiled three pertinent aspects you should further examine:
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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.
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Valuation: What is 934 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 934 is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 934? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.