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Since Precision Tsugami (China) Corporation Limited (HKG:1651) released its earnings in March 2018, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 39% next year compared with the past 5-year average growth rate of 22%. With trailing-twelve-month net income at current levels of CN¥194m, we should see this rise to CN¥269m in 2019. Below is a brief commentary around Precision Tsugami (China)’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for Precision Tsugami (China)
What can we expect from Precision Tsugami (China) in the longer term?
Over the next three years, it seems the consensus view of the 5 analysts covering 1651 is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of 1651’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¥194m and the final forecast of CN¥366m by 2021, the annual rate of growth for 1651’s earnings is 20%. EPS reaches CN¥1.01 in the final year of forecast compared to the current CN¥0.57 EPS today. The main reason for growth is a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. In 2021, 1651’s profit margin will have expanded from 8.4% to 9.8%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Precision Tsugami (China), I’ve put together three fundamental 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 Precision Tsugami (China) 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 Precision Tsugami (China) 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 Precision Tsugami (China)? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.