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The most recent earnings release Guangdong Kanghua Healthcare Co., Ltd.'s (HKG:3689) announced in December 2018 signalled that the business experienced a small tailwind, eventuating to a single-digit earnings growth of 7.2%. Below, I've laid out key numbers on how market analysts predict Guangdong Kanghua Healthcare's earnings growth trajectory over the next few 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.
Check out our latest analysis for Guangdong Kanghua Healthcare
Market analysts' consensus outlook for the coming year seems positive, with earnings expanding by a robust 22%. This growth seems to continue into the following year with rates reaching double digit 47% compared to today’s earnings, and finally hitting CN¥273m by 2022.
While it’s useful to be aware of the growth rate year by year relative to today’s level, it may be more valuable to estimate the rate at which the business is rising or falling on average every year. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Guangdong Kanghua Healthcare'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 13%. This means, we can anticipate Guangdong Kanghua Healthcare will grow its earnings by 13% every year for the next few years.
Next Steps:
For Guangdong Kanghua Healthcare, I've put together three key 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 3689 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 3689 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 3689? 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.