As Canvest Environmental Protection Group Company Limited (HKG:1381) announced its earnings release on 31 December 2018, analyst forecasts seem fairly subdued, with earnings expected to grow by 16% in the upcoming year against the higher past 5-year average growth rate of 34%. Presently, with latest-twelve-month earnings at HK$754m, we should see this growing to HK$877m by 2020. Below is a brief commentary on the longer term outlook the market has for Canvest Environmental Protection Group. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Canvest Environmental Protection Group in the longer term?
The 8 analysts covering 1381 view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.
From the current net income level of HK$754m and the final forecast of HK$1.1b by 2022, the annual rate of growth for 1381’s earnings is 12%. This leads to an EPS of HK$0.44 in the final year of projections relative to the current EPS of HK$0.31. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 23% to 18% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Canvest Environmental Protection Group, there are three key factors 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 Canvest Environmental Protection Group’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 Canvest Environmental Protection Group? 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.