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The latest earnings update China Resources Land Limited (HKG:1109) released in December 2018 suggested that the business gained from a robust tailwind, leading to a double-digit earnings growth of 23%. Below, I've laid out key numbers on how market analysts perceive China Resources Land'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.
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Check out our latest analysis for China Resources Land
Market analysts' prospects for next year seems rather subdued, with earnings expanding by a single digit 5.5%. The growth outlook in the following year seems much more optimistic with rates reaching double digit 21% compared to today’s earnings, and finally hitting CN¥34b by 2022.
While it’s informative knowing the rate of growth year by year relative to today’s figure, it may be more valuable determining the rate at which the earnings are moving on average every year. The advantage of this approach is that we can get a better picture of the direction of China Resources Land'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 12%. This means, we can anticipate China Resources Land will grow its earnings by 12% every year for the next few years.
Next Steps:
For China Resources Land, I've put together three pertinent 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 1109 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 1109 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 1109? 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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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.