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In December 2018, China Everbright International Limited (HKG:257) announced its latest earnings update, which suggested that the company benefited from a robust tailwind, leading to a double-digit earnings growth of 23%. Below, I've presented key growth figures on how market analysts view China Everbright International's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for China Everbright International

Analysts' outlook for this coming year seems optimistic, with earnings growing by a robust 24%. This growth seems to continue into the following year with rates arriving at double digit 48% compared to today’s earnings, and finally hitting HK$7.3b by 2022.

While it’s informative understanding the rate of growth year by year relative to today’s level, it may be more beneficial to gauge the rate at which the company is rising or falling on average every year. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of China Everbright International's earnings trajectory over time, which may be more relevant for long term investors. To calculate 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 17%. This means, we can assume China Everbright International will grow its earnings by 17% every year for the next couple of years.

Next Steps:

For China Everbright International, I've put together three key factors you should look at:

1. 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.

2. Valuation: What is 257 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 257 is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 257? 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.