China Sanjiang Fine Chemicals Company Limited (HKG:2198): Poised For Long Term Success?
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Based on China Sanjiang Fine Chemicals Company Limited's (HKG:2198) earnings update on 31 December 2018, analysts seem cautiously bearish, as a 10% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 21%. Currently with trailing-twelve-month earnings of CN¥399m, we can expect this to reach CN¥440m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for China Sanjiang Fine Chemicals
Exciting times ahead?
The longer term expectations from the 1 analysts of 2198 is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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, 2198's earnings should reach CN¥520m, from current levels of CN¥399m, resulting in an annual growth rate of 9.4%. This leads to an EPS of CN¥0.51 in the final year of projections relative to the current EPS of CN¥0.39. Margins are currently sitting at 4.2%, which is expected to expand to 4.7% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For China Sanjiang Fine Chemicals, I've compiled three important factors you should further examine:
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.
Valuation: What is China Sanjiang Fine Chemicals 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 Sanjiang Fine Chemicals is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Sanjiang Fine Chemicals? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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