In April 2019, Zhaojin Mining Industry Company Limited (HKG:1818) announced its latest earnings update, which showed that the company faced a major headwind with earnings falling by -26%. Below, I’ve laid out key growth figures on how market analysts perceive Zhaojin Mining Industry’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for next year seems optimistic, with earnings climbing by a significant 56%. This high growth in earnings is expected to continue, bringing the bottom line up to CN¥1.1b by 2022.
While it is informative knowing the growth rate each year relative to today’s value, it may be more insightful determining the rate at which the earnings are growing on average every year. The advantage of this method is that we can get a better picture of the direction of Zhaojin Mining Industry’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended 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 24%. This means that, we can anticipate Zhaojin Mining Industry will grow its earnings by 24% every year for the next few years.
For Zhaojin Mining Industry, I’ve compiled three relevant factors you should look at:
- 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.
- Valuation: What is 1818 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 1818 is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1818? 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 firstname.lastname@example.org. 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.