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In June 2018, China Resources Gas Group Limited (HKG:1193) released its earnings update. Generally, analysts seem fairly confident, with profits predicted to increase by 15% next year relative to the past 5-year average growth rate of 14%. Presently, with latest-twelve-month earnings at HK$3.7b, we should see this growing to HK$4.2b by 2019. 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.
Check out our latest analysis for China Resources Gas Group
Can we expect China Resources Gas Group to keep growing?
The view from 23 analysts over the next three years is one of 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.
This results in an annual growth rate of 12% based on the most recent earnings level of HK$3.7b to the final forecast of HK$4.9b by 2021. EPS reaches HK$2.55 in the final year of forecast compared to the current HK$1.68 EPS today. By the end of 2021, analysts are expecting earnings to outpace revenue, and margins to expand from the current 9.2% to 9.2%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For China Resources Gas Group, I’ve compiled three pertinent aspects you should look at:
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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 China Resources Gas Group 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 Resources Gas Group 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 China Resources Gas Group? 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.