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Looking at CRCC High-Tech Equipment Corporation Limited's (HKG:1786) earnings update in December 2018, it seems that analyst forecasts are fairly optimistic, as a 29% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of -23%. Currently with trailing-twelve-month earnings of CN¥156m, we can expect this to reach CN¥202m by 2020. Below is a brief commentary around CRCC High-Tech Equipment's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
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Check out our latest analysis for CRCC High-Tech Equipment
Can we expect CRCC High-Tech Equipment to keep growing?
The longer term view from the 5 analysts covering 1786 is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of 1786'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.
This results in an annual growth rate of 21% based on the most recent earnings level of CN¥156m to the final forecast of CN¥299m by 2022. This leads to an EPS of CN¥0.20 in the final year of projections relative to the current EPS of CN¥0.10. With a current profit margin of 6.5%, this movement will result in a margin of 8.4% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For CRCC High-Tech Equipment, there are three fundamental 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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Valuation: What is CRCC High-Tech Equipment 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 CRCC High-Tech Equipment 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 CRCC High-Tech Equipment? 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.