What Should You Know About Anhui Conch Cement Company Limited's (HKG:914) Future?
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As Anhui Conch Cement Company Limited (HKG:914) released its latest earnings announcement on 31 December 2018, analyst forecasts appear to be pessimistic, as a -4.0% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 21%. Presently, with latest-twelve-month earnings at CN¥30b, we should see this fall to CN¥29b by 2020. Below is a brief commentary around Anhui Conch Cement's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for Anhui Conch Cement
Exciting times ahead?
The 20 analysts covering 914 view its longer term outlook with a negative sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of 914'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.
From the current net income level of CN¥30b and the final forecast of CN¥29b by 2022, the annual rate of growth for 914’s earnings is -1.7%. However, if we exclude extraordinary items from earnings, we see that the profits is predicted to rise over time, resulting in an EPS of CN¥5.84 in the final year of forecast compared to the current CN¥5.63 EPS today. The primary reason for earnings contraction is due to cost outpacing top line growth of 1.1% over the next few years. With this high cost growth, margins is expected to contract from 23% to 22% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Anhui Conch Cement, there are three essential factors you should further research:
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.
Valuation: What is Anhui Conch Cement 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 Anhui Conch Cement is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Anhui Conch Cement? 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.