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In December 2018, Fu Shou Yuan International Group Limited (HKG:1448) released its most recent earnings announcement, which showed that the company gained from a robust tailwind, leading to a double-digit earnings growth of 17%. Below is my commentary, albeit very simple and high-level, on how market analysts predict Fu Shou Yuan International Group's earnings growth outlook over the next few years and whether the future looks even brighter than the past. 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 Fu Shou Yuan International Group
Analysts' expectations for next year seems optimistic, with earnings growing by a robust 23%. This growth seems to continue into the following year with rates reaching double digit 46% compared to today’s earnings, and finally hitting CN¥831m by 2022.
Even though it is informative knowing the rate of growth year by year relative to today’s level, it may be more insightful to gauge the rate at which the company is rising or falling on average every year. The advantage of this method is that we can get a better picture of the direction of Fu Shou Yuan International Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 17%. This means that, we can anticipate Fu Shou Yuan International Group will grow its earnings by 17% every year for the next few years.
Next Steps:
For Fu Shou Yuan International Group, I've compiled three key 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 1448 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 1448 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 1448? 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.