The latest earnings release China Everbright Greentech Limited’s (HKG:1257) announced in December 2017 signalled that the company benefited from a large tailwind, eventuating to a high double-digit earnings growth of 51.59%. Today I want to provide a brief commentary on how market analysts view China Everbright Greentech’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. Check out our latest analysis for China Everbright Greentech
Market analysts’ prospects for next year seems buoyant, with earnings expanding by a robust 40.92%. This growth seems to continue into the following year with rates arriving at double digit 77.54% compared to today’s earnings, and finally hitting HK$2.01b by 2021.
Although it’s informative knowing the growth rate each year relative to today’s value, it may be more insightful gauging the rate at which the company is rising or falling every year, on average. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of China Everbright Greentech’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put 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 23.33%. This means that, we can assume China Everbright Greentech will grow its earnings by 23.33% every year for the next couple of years.
Next Steps:
For China Everbright Greentech, I’ve compiled three relevant 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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Future Earnings: How does 1257’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1257? 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.