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China Yongda Automobiles Services Holdings Limited’s (HKG:3669) most recent earnings update in December 2018 suggested that the business experienced a significant headwind with earnings declining by -17%. Below is my commentary, albeit very simple and high-level, on how market analysts view China Yongda Automobiles Services Holdings’s earnings growth outlook over the next few 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.
Market analysts’ prospects for the coming year seems positive, with earnings growing by a robust 27%. This growth seems to continue into the following year with rates reaching double digit 55% compared to today’s earnings, and finally hitting CN¥2.3b by 2022.
Although it is helpful to be aware of the growth year by year relative to today’s figure, it may be more valuable to evaluate the rate at which the earnings are moving every year, on average. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of China Yongda Automobiles Services Holdings’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 20%. This means, we can presume China Yongda Automobiles Services Holdings will grow its earnings by 20% every year for the next couple of years.
For China Yongda Automobiles Services Holdings, I’ve compiled three essential aspects you should look at:
- 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.
- Future Earnings: How does 3669’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 3669? 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 email@example.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.