Will Haier Electronics Group Co., Ltd.'s (HKG:1169) Earnings Grow In The Next Couple Of Years?

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Haier Electronics Group Co., Ltd.'s (HKG:1169) latest earnings update in April 2019 showed that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 14%. Below is a brief commentary on my key takeaways on how market analysts view Haier Electronics Group's earnings growth outlook over the next couple of 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.

View our latest analysis for Haier Electronics Group

Analysts' outlook for the upcoming year seems positive, with earnings growing by a robust 11%. This growth seems to continue into the following year with rates reaching double digit 22% compared to today’s earnings, and finally hitting CN¥5.0b by 2022.

While it is useful to understand the rate of growth each year relative to today’s value, it may be more insightful to analyze the rate at which the earnings are growing every year, on average. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Haier Electronics Group's earnings trajectory over time, 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 7.7%. This means that, we can presume Haier Electronics Group will grow its earnings by 7.7% every year for the next couple of years.

Next Steps:

For Haier Electronics Group, I've put together three fundamental aspects you should further examine:

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 1169 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 1169 is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1169? 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.