China State Construction International Holdings Limited (HKG:3311): Immense Growth Potential?

Simply Wall St

After China State Construction International Holdings Limited’s (HKG:3311) earnings announcement on 31 December 2018, analysts seem cautiously optimistic, with profits predicted to increase by 30% next year relative to the past 5-year average growth rate of 12%. Presently, with latest-twelve-month earnings at HK$4.5b, we should see this growing to HK$5.9b by 2020. Below is a brief commentary on the longer term outlook the market has for China State Construction International Holdings. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for China State Construction International Holdings

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How will China State Construction International Holdings perform in the near future?

The view from 15 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of 3311’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.

SEHK:3311 Past and Future Earnings, March 24th 2019

From the current net income level of HK$4.5b and the final forecast of HK$7.5b by 2022, the annual rate of growth for 3311’s earnings is 19%. EPS reaches HK$1.48 in the final year of forecast compared to the current HK$0.89 EPS today. In 2022, 3311’s profit margin will have expanded from 8.1% to 8.9%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For China State Construction International Holdings, I’ve compiled three relevant factors you should further research:

  1. 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.
  2. Valuation: What is China State Construction International 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 China State Construction International Holdings is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China State Construction International 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 editorial-team@simplywallst.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.