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As Shimao Property Holdings Limited (HKG:813) released its earnings announcement on 31 December 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 30% in the upcoming year against the past 5-year average growth rate of 0.3%. With trailing-twelve-month net income at current levels of CN¥8.8b, we should see this rise to CN¥11b in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Shimao Property Holdings in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for Shimao Property Holdings
How is Shimao Property Holdings going to perform in the near future?
The longer term expectations from the 24 analysts of 813 is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of 813's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, 813's earnings should reach CN¥17b, from current levels of CN¥8.8b, resulting in an annual growth rate of 21%. This leads to an EPS of CN¥5.15 in the final year of projections relative to the current EPS of CN¥2.65. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 10% to 9.8% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Shimao Property Holdings, I've put together three fundamental 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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Valuation: What is Shimao Property Holdings 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 Shimao Property Holdings 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 Shimao Property Holdings? 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.