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Sinotruk (Hong Kong) Limited's (HKG:3808) most recent earnings update in April 2019 suggested that the company benefited from a robust tailwind, eventuating to a double-digit earnings growth of 44%. Below, I've presented key growth figures on how market analysts predict Sinotruk (Hong Kong)'s earnings growth trajectory 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.
View our latest analysis for Sinotruk (Hong Kong)
Market analysts' consensus outlook for this coming year seems pessimistic, with earnings reducing by -3.8%. Over the medium term, earnings should continue to be below today's level, with a fall of -4.6% in 2021, eventually reaching CN¥4.1b in 2022.
While it is useful to understand the growth rate each year relative to today’s figure, it may be more beneficial estimating the rate at which the earnings are growing on average every year. The advantage of this technique is that we can get a bigger picture of the direction of Sinotruk (Hong Kong)'s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate this rate, I've appended 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 -1.6%. This means, we can presume Sinotruk (Hong Kong) will chip away at a rate of -1.6% every year for the next couple of years.
Next Steps:
For Sinotruk (Hong Kong), I've put together three relevant factors you should further examine:
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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 3808 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 3808 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 3808? 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.