Beijing Chunlizhengda Medical Instruments Co., Ltd. (HKG:1858): Are Analysts Bullish?

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Beijing Chunlizhengda Medical Instruments Co., Ltd.'s (HKG:1858) most recent earnings announcement in April 2019 signalled that the business gained from a sizeable tailwind, leading to a high double-digit earnings growth of 55%. Investors may find it useful to understand how market analysts perceive Beijing Chunlizhengda Medical Instruments's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Beijing Chunlizhengda Medical Instruments

Market analysts' prospects for the coming year seems positive, with earnings climbing by a robust 33%. This growth seems to continue into the following year with rates arriving at double digit 56% compared to today’s earnings, and finally hitting CN¥193m by 2022.

Even though it’s informative understanding the growth each year relative to today’s figure, it may be more beneficial to gauge the rate at which the company is growing every year, on average. The benefit of this approach is that we can get a bigger picture of the direction of Beijing Chunlizhengda Medical Instruments's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 19%. This means that, we can assume Beijing Chunlizhengda Medical Instruments will grow its earnings by 19% every year for the next couple of years.

Next Steps:

For Beijing Chunlizhengda Medical Instruments, there are three relevant aspects you should further research:

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 1858 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 1858 is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1858? 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.