Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In December 2018, Kunlun Energy Company Limited (HKG:135) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 44% next year relative to the past 5-year average growth rate of -5.1%. By 2020, we can expect Kunlun Energy’s bottom line to reach CN¥6.7b, a jump from the current trailing-twelve-month of CN¥4.6b. Below is a brief commentary on the longer term outlook the market has for Kunlun Energy. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How is Kunlun Energy going to perform in the near future?
Over the next three years, it seems the consensus view of the 17 analysts covering 135 is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 14% based on the most recent earnings level of CN¥4.6b to the final forecast of CN¥7.9b by 2022. EPS reaches CN¥0.97 in the final year of forecast compared to the current CN¥0.57 EPS today. With a current profit margin of 4.4%, this movement will result in a margin of 5.3% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Kunlun Energy, I've compiled three relevant 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 Kunlun Energy 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 Kunlun Energy is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kunlun Energy? 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.