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Looking at China Chunlai Education Group Co., Ltd.'s (HKG:1969) earnings update on 28 February 2019, analysts seem highly optimistic, as a 56% rise in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 34%. By 2020, we can expect China Chunlai Education Group’s bottom line to reach CN¥186m, a jump from the current trailing-twelve-month of CN¥119m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for China Chunlai Education Group in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from China Chunlai Education Group in the longer term?
The longer term view from the 2 analysts covering 1969 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 1969'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.
From the current net income level of CN¥119m and the final forecast of CN¥287m by 2022, the annual rate of growth for 1969’s earnings is 26%. This leads to an EPS of CN¥0.23 in the final year of projections relative to the current EPS of CN¥0.14. With a current profit margin of 24%, this movement will result in a margin of 35% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For China Chunlai Education Group, I've compiled three important aspects you should further examine:
- 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 China Chunlai Education Group 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 China Chunlai Education Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Chunlai Education 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.