ENN Energy Holdings Limited (HKG:2688): Poised For Long Term Success?

Simply Wall St

Based on ENN Energy Holdings Limited's (HKG:2688) earnings update on 31 December 2018, analysts seem highly optimistic, with earnings expected to grow by a high double-digit of 75% in the upcoming year, relative to the previous 5-year average growth rate of 7.4%. By 2020, we can expect ENN Energy Holdings’s bottom line to reach CN¥4.9b, a jump from the current trailing-twelve-month of CN¥2.8b. Below is a brief commentary on the longer term outlook the market has for ENN Energy Holdings. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for ENN Energy Holdings

How is ENN Energy Holdings going to perform in the near future?

The longer term expectations from the 25 analysts of 2688 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 understand the overall trajectory of 2688'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:2688 Past and Future Earnings, April 20th 2019

From the current net income level of CN¥2.8b and the final forecast of CN¥6.6b by 2022, the annual rate of growth for 2688’s earnings is 20%. This leads to an EPS of CN¥5.97 in the final year of projections relative to the current EPS of CN¥2.56. With a current profit margin of 4.6%, this movement will result in a margin of 6.2% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For ENN Energy Holdings, I've compiled three relevant aspects you should further examine:

  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 ENN Energy 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 ENN Energy Holdings is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ENN Energy 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.