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On 30 June 2018, JNBY Design Limited (HKG:3306) announced its earnings update. Overall, it seems that analyst forecasts are fairly optimistic, as a 20.3% increase in profits is expected in the upcoming year, though this is comparatively lower than the historical 5-year average earnings growth of 24.5%. Presently, with latest-twelve-month earnings at CN¥410.4m, we should see this growing to CN¥493.5m by 2019. Below is a brief commentary on the longer term outlook the market has for JNBY Design. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for JNBY Design
Can we expect JNBY Design to keep growing?
The 4 analysts covering 3306 view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of 3306’s earnings growth over these next few years.
This results in an annual growth rate of 18.5% based on the most recent earnings level of CN¥410.4m to the final forecast of CN¥714.2m by 2021. This leads to an EPS of CN¥1.39 in the final year of projections relative to the current EPS of CN¥0.80. Earnings growth appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. In 2021, 3306’s profit margin will have expanded from 14.3% to 15.3%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For JNBY Design, there are three key aspects you should further research:
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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 JNBY Design 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 JNBY Design 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 JNBY Design? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.