What Should We Expect From Great Wall Motor Company Limited's (HKG:2333) Earnings In The Years Ahead?
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The most recent earnings announcement Great Wall Motor Company Limited's (HKG:2333) released in December 2018 indicated that the company gained from a slight tailwind, leading to a single-digit earnings growth of 3.6%. Below, I've presented key growth figures on how market analysts predict Great Wall Motor's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Great Wall Motor
Analysts' expectations for this coming year seems pessimistic, with earnings declining by -0.5%. But in the following year, there is a complete contrast in performance, with reaching double digit 8.0% compared to today’s level and continues to increase to CN¥6.0b in 2022.
Although it is helpful to understand the rate of growth year by year relative to today’s figure, it may be more insightful to gauge the rate at which the company is moving every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of Great Wall Motor's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 5.1%. This means that, we can assume Great Wall Motor will grow its earnings by 5.1% every year for the next few years.
Next Steps:
For Great Wall Motor, I've put together three important factors 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 2333 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 2333 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 2333? 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.
