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The latest earnings announcement CK Asset Holdings Limited (HKG:1113) released in April 2019 confirmed that the business gained from a robust tailwind, leading to a double-digit earnings growth of 33%. Below is a brief commentary on my key takeaways on how market analysts perceive CK Asset Holdings's earnings growth trajectory 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.

Check out our latest analysis for CK Asset Holdings

Analysts' outlook for the coming year seems pessimistic, with earnings declining by a double-digit -30%. Over the medium term, earnings are expected to continue to be below today's level, with a decline of -36% in 2021, eventually reaching HK$26b in 2022.

Although it is useful to understand the growth each year relative to today’s level, it may be more valuable determining the rate at which the company is growing every year, on average. The pro of this method is that we can get a better picture of the direction of CK Asset Holdings's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I've inserted 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 -15%. This means, we can expect CK Asset Holdings will chip away at a rate of -15% every year for the next few years.

Next Steps:

For CK Asset Holdings, there are three relevant aspects you should further research:

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 1113 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 1113 is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1113? 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.