What Should We Expect From China Everbright Greentech Limited's (HKG:1257) Earnings Over The Next Few Years?
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The most recent earnings release China Everbright Greentech Limited's (HKG:1257) announced in December 2018 confirmed that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 39%. Below is my commentary, albeit very simple and high-level, on how market analysts view China Everbright Greentech's earnings growth trajectory 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 Everbright Greentech
Market analysts' consensus outlook for next year seems positive, with earnings expanding by a robust 27%. This growth seems to continue into the following year with rates reaching double digit 60% compared to today’s earnings, and finally hitting HK$2.5b by 2022.
Even though it is informative knowing the rate of growth year by year relative to today’s value, it may be more insightful to determine the rate at which the company is growing every year, on average. The advantage of this technique is that it ignores 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've inserted 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 20%. This means, we can anticipate China Everbright Greentech will grow its earnings by 20% every year for the next few years.
Next Steps:
For China Everbright Greentech, I've put together three key aspects you should further research:
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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!
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.