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Based on Xinyi Solar Holdings Limited’s (HKG:968) earnings update in December 2018, it seems that analyst forecasts are fairly optimistic, with earnings growth rate expected to be 31% next year, which is within range of the past five-year average earnings growth of 32%. By 2020, we can expect Xinyi Solar Holdings’s bottom line to reach HK$2.4b, a jump from the current trailing-twelve-month of HK$1.9b. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Xinyi Solar Holdings in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Xinyi Solar Holdings to keep growing?
The longer term view from the 21 analysts covering 968 is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of 968’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, 968’s earnings should reach HK$3.5b, from current levels of HK$1.9b, resulting in an annual growth rate of 20%. This leads to an EPS of HK$0.45 in the final year of projections relative to the current EPS of HK$0.25. Margins are currently sitting at 24%, which is expected to expand to 27% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Xinyi Solar Holdings, I’ve put together three pertinent 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 Xinyi Solar Holdings 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 Xinyi Solar Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Xinyi Solar Holdings? 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.