Based on China Machinery Engineering Corporation's (HKG:1829) earnings update in December 2018, analysts seem fairly confident, with earnings expected to grow by 1.5% in the upcoming year against the past 5-year average growth rate of -0.9%. By 2020, we can expect China Machinery Engineering’s bottom line to reach CN¥2.2b, a jump from the current trailing-twelve-month of CN¥2.1b. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for China Machinery Engineering

What can we expect from China Machinery Engineering in the longer term?

The 6 analysts covering 1829 view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

By 2022, 1829's earnings should reach CN¥2.8b, from current levels of CN¥2.1b, resulting in an annual growth rate of 9.6%. This leads to an EPS of CN¥0.68 in the final year of projections relative to the current EPS of CN¥0.52. In 2022, 1829's profit margin will have expanded from 7.4% to 7.6%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For China Machinery Engineering, I've compiled three fundamental 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 China Machinery Engineering 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 China Machinery Engineering is currently mispriced by the market.

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