How Do Analysts See China Energy Engineering Corporation Limited (HKG:3996) Performing Over The Next Few Years?

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China Energy Engineering Corporation Limited's (HKG:3996) latest earnings announcement in December 2018 suggested that the business experienced a substantial headwind with earnings falling by -13%. Below, I've laid out key numbers on how market analysts predict China Energy Engineering's earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for China Energy Engineering

Analysts' outlook for next year seems optimistic, with earnings climbing by a robust 10%. This growth seems to continue into the following year with rates reaching double digit 28% compared to today’s earnings, and finally hitting CN¥5.9b by 2022.

Even though it is informative knowing the rate of growth year by year relative to today’s value, it may be more valuable to determine the rate at which the business is moving on average every year. The advantage of this approach is that we can get a bigger picture of the direction of China Energy Engineering'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 inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 9.5%. This means that, we can expect China Energy Engineering will grow its earnings by 9.5% every year for the next few years.

Next Steps:

For China Energy Engineering, I've compiled three pertinent factors you should look at:

1. 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.
2. Valuation: What is 3996 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 3996 is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 3996? 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.