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Based on Xinyi Glass Holdings Limited’s (HKG:868) earnings update in December 2018, analyst forecasts seem fairly subdued, as a 1.4% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 15%. Presently, with latest-twelve-month earnings at HK$4.2b, we should see this growing to HK$4.3b 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.
What can we expect from Xinyi Glass Holdings in the longer term?
Over the next three years, it seems the consensus view of the 12 analysts covering 868 is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of 868’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 8.3% based on the most recent earnings level of HK$4.2b to the final forecast of HK$5.3b by 2022. This leads to an EPS of HK$1.32 in the final year of projections relative to the current EPS of HK$1.06. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 26% to 24% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Xinyi Glass Holdings, I’ve compiled three pertinent factors you should further research:
- 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 Xinyi Glass Holdings 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 Xinyi Glass Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Xinyi Glass 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.