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In December 2018, Minsheng Education Group Company Limited (HKG:1569) released its earnings update. Generally, the consensus outlook from analysts appear fairly confident, as a 32% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 13%. By 2020, we can expect Minsheng Education Group’s bottom line to reach CN¥439m, a jump from the current trailing-twelve-month of CN¥333m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Minsheng Education Group
Can we expect Minsheng Education Group to keep growing?
Longer term expectations from the 10 analysts covering 1569’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of 1569's earnings growth over these next few years.
From the current net income level of CN¥333m and the final forecast of CN¥602m by 2022, the annual rate of growth for 1569’s earnings is 19%. EPS reaches CN¥0.15 in the final year of forecast compared to the current CN¥0.083 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 53% to 42% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Minsheng Education Group, there are three fundamental factors 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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Valuation: What is Minsheng Education Group 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 Minsheng Education Group 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 Minsheng Education Group? 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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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.