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Based on Dongfeng Motor Group Company Limited's (HKG:489) earnings update in December 2018, analysts seem cautiously bearish, with earnings expected to grow by 1.9% in the upcoming year compared with the higher past 5-year average growth rate of 4.2%. By 2020, we can expect Dongfeng Motor Group’s bottom line to reach CN¥13b, a jump from the current trailing-twelve-month of CN¥13b. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for Dongfeng Motor Group
How is Dongfeng Motor Group going to perform in the near future?
Over the next three years, it seems the consensus view of the 22 analysts covering 489 is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for 489, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 2.5% based on the most recent earnings level of CN¥13b to the final forecast of CN¥14b by 2022. This leads to an EPS of CN¥1.64 in the final year of projections relative to the current EPS of CN¥1.51. In 2022, 489's profit margin will have expanded from 12% to 13%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Dongfeng Motor Group, I've compiled three essential factors you should further research:
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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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Future Earnings: How does Dongfeng Motor Group's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Dongfeng Motor Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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