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In December 2018, Brilliance China Automotive Holdings Limited (HKG:1114) announced its earnings update. Overall, analyst consensus outlook appear cautiously optimistic, as a 18% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 4.6%. Currently with trailing-twelve-month earnings of CN¥5.8b, we can expect this to reach CN¥6.9b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Brilliance China Automotive Holdings to keep growing?
The longer term expectations from the 23 analysts of 1114 is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of 1114’s earnings growth over these next few years.
By 2022, 1114’s earnings should reach CN¥8.4b, from current levels of CN¥5.8b, resulting in an annual growth rate of 12%. This leads to an EPS of CN¥1.67 in the final year of projections relative to the current EPS of CN¥1.15. Margins are currently sitting at 133%, which is expected to expand to 151% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Brilliance China Automotive Holdings, I’ve put together three essential 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.
- Future Earnings: How does Brilliance China Automotive Holdings’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Brilliance China Automotive Holdings? 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 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.