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The latest earnings update China Taiping Insurance Holdings Company Limited’s (SEHK:966) released in December 2017 confirmed that the company experienced a strong tailwind, eventuating to a double-digit earnings growth of 30.11%. Below, I’ve laid out key numbers on how market analysts predict China Taiping Insurance Holdings’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. 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 China Taiping Insurance Holdings
Market analysts’ consensus outlook for the upcoming year seems optimistic, with earnings growing by a robust 26.15%. This growth seems to continue into the following year with rates arriving at double digit 45.47% compared to today’s earnings, and finally hitting HK$9.84B by 2021.
While it is useful to understand the growth each year relative to today’s figure, it may be more beneficial estimating the rate at which the business is rising or falling on average every year. The advantage of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of China Taiping Insurance Holdings’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 16.63%. This means, we can presume China Taiping Insurance Holdings will grow its earnings by 16.63% every year for the next couple of years.
Next Steps:
For China Taiping Insurance Holdings, there are three relevant aspects you should further examine:
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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 966 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 966 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 966? 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 pass 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.