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Based on Beijing Enterprises Water Group Limited's (HKG:371) earnings update in December 2018, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 19% in the upcoming year compared with the higher past 5-year average growth rate of 24%. By 2020, we can expect Beijing Enterprises Water Group’s bottom line to reach HK$5.3b, a jump from the current trailing-twelve-month of HK$4.5b. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for Beijing Enterprises Water Group
What can we expect from Beijing Enterprises Water Group in the longer term?
Longer term expectations from the 17 analysts covering 371’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for 371, 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.
By 2022, 371's earnings should reach HK$7.3b, from current levels of HK$4.5b, resulting in an annual growth rate of 16%. This leads to an EPS of HK$0.71 in the final year of projections relative to the current EPS of HK$0.48. Margins are currently sitting at 18%, which is expected to expand to 22% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Beijing Enterprises Water Group, there are three essential 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 Beijing Enterprises Water Group 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 Beijing Enterprises Water Group 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 Beijing Enterprises Water 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!
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.