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In March 2019, China Cinda Asset Management Co., Ltd. (HKG:1359) released its latest earnings announcement, which revealed that the company experienced a major headwind with earnings falling by -36%. Below is my commentary, albeit very simple and high-level, on how market analysts predict China Cinda Asset Management's earnings growth trajectory over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for China Cinda Asset Management
Market analysts' consensus outlook for next year seems optimistic, with earnings increasing by a robust 30%. This growth seems to continue into the following year with rates arriving at double digit 50% compared to today’s earnings, and finally hitting CN¥17b by 2022.
While it is helpful to be aware of the growth rate each year relative to today’s value, it may be more insightful to determine the rate at which the business is growing every year, on average. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of China Cinda Asset Management's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put 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 12%. This means, we can expect China Cinda Asset Management will grow its earnings by 12% every year for the next few years.
Next Steps:
For China Cinda Asset Management, I've compiled three pertinent aspects 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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Valuation: What is 1359 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 1359 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 1359? 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.