On 31 December 2018, Great Wall Motor Company Limited (HKG:2333) released its earnings update. Generally, analysts seem fairly confident, with earnings expected to grow by 0.3% in the upcoming year relative to the past 5-year average growth rate of -7.0%. With trailing-twelve-month net income at current levels of CN¥5.2b, we should see this rise to CN¥5.2b in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Exciting times ahead?
The longer term expectations from the 31 analysts of 2333 is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. 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.
By 2022, 2333's earnings should reach CN¥6.2b, from current levels of CN¥5.2b, resulting in an annual growth rate of 5.8%. EPS reaches CN¥0.62 in the final year of forecast compared to the current CN¥0.57 EPS today. Margins are currently sitting at 5.2%, approximately the same as previous years. With analysts forecasting revenue growth of 0.18948 and 2333's net income growth expected to roughly track that, this company may add value for shareholders over time.
Future outlook is only one aspect when you're building an investment case for a stock. For Great Wall Motor, I've compiled three essential 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 Great Wall Motor 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 Great Wall Motor is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Great Wall Motor? 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.