Dali Foods Group Company Limited’s (SEHK:3799) latest earnings update in December 2017 indicated that the company experienced a small tailwind, eventuating to a single-digit earnings growth of 9.47%. Below is my commentary, albeit very simple and high-level, on how market analysts view Dali Foods Group’s earnings growth outlook over the next couple of 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. View our latest analysis for Dali Foods Group
Analysts’ outlook for the coming year seems positive, with earnings growing by a robust 12.59%. This growth seems to continue into the following year with rates reaching double digit 28.64% compared to today’s earnings, and finally hitting CN¥4.89B by 2021.
Although it is useful to understand the growth rate each year relative to today’s figure, it may be more valuable to determine the rate at which the business is moving every year, on average. The advantage of this approach is that we can get a better picture of the direction of Dali Foods Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 11.90%. This means, we can anticipate Dali Foods Group will grow its earnings by 11.90% every year for the next few years.
Next Steps:
For Dali Foods Group, I’ve compiled three pertinent aspects 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 3799 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 3799 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 3799? 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 pass 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.