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In December 2018, Yihai International Holding Ltd. (HKG:1579) announced its earnings update. Overall, it seems that analyst forecasts are fairly optimistic, with earnings growth rate expected to be 38% in the upcoming year, relative to the past five-year average earnings growth of 41% per year. By 2020, we can expect Yihai International Holding’s bottom line to reach CN¥716m, a jump from the current trailing-twelve-month of CN¥518m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Yihai International Holding in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for Yihai International Holding

What can we expect from Yihai International Holding in the longer term?

The view from 7 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of 1579'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.

This results in an annual growth rate of 27% based on the most recent earnings level of CN¥518m to the final forecast of CN¥1.3b by 2022. This leads to an EPS of CN¥1.27 in the final year of projections relative to the current EPS of CN¥0.53. By the end of 2022, analysts are expecting earnings to outpace revenue, and margins to expand from the current 19% to 20%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Yihai International Holding, I've compiled three fundamental 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 Yihai International Holding 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 Yihai International Holding is currently mispriced by the market.

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