As Shandong Weigao Group Medical Polymer Company Limited (HKG:1066) released its earnings announcement on 31 December 2018, analysts seem fairly confident, as a 21% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 18%. By 2020, we can expect Shandong Weigao Group Medical Polymer’s bottom line to reach CN¥1.8b, a jump from the current trailing-twelve-month of CN¥1.5b. Below is a brief commentary around Shandong Weigao Group Medical Polymer's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Shandong Weigao Group Medical Polymer in the longer term?
The 10 analysts covering 1066 view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for 1066, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 15% based on the most recent earnings level of CN¥1.5b to the final forecast of CN¥2.3b by 2022. This leads to an EPS of CN¥0.50 in the final year of projections relative to the current EPS of CN¥0.33. In 2022, 1066's profit margin will have expanded from 17% to 20%.
Future outlook is only one aspect when you're building an investment case for a stock. For Shandong Weigao Group Medical Polymer, there are three relevant 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.
- Valuation: What is Shandong Weigao Group Medical Polymer 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 Shandong Weigao Group Medical Polymer is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Shandong Weigao Group Medical Polymer? 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.