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Minth Group Limited's (HKG:425) announced its latest earnings update in December 2018, which indicated that the business faced a major headwind with earnings declining by -18%. Today I want to provide a brief commentary on how market analysts view Minth Group's earnings growth trajectory over the next couple of years and whether the future looks brighter. 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.

See our latest analysis for Minth Group

Analysts' expectations for the coming year seems buoyant, with earnings growing by a robust 18%. This growth seems to continue into the following year with rates reaching double digit 39% compared to today’s earnings, and finally hitting CN¥2.6b by 2022.

Even though it is informative knowing the rate of growth each year relative to today’s figure, it may be more insightful gauging the rate at which the business is moving every year, on average. The benefit of this approach is that we can get a better picture of the direction of Minth Group'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 15%. This means, we can assume Minth Group will grow its earnings by 15% every year for the next few years.

Next Steps:

For Minth Group, I've put together three pertinent aspects you should further examine:

1. 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.

2. Valuation: What is 425 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 425 is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 425? 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.