What Can We Expect From K. Wah International Holdings Limited's (HKG:173) Earnings Over The Next Year?
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After K. Wah International Holdings Limited's (HKG:173) recent earnings announcement in December 2018, analyst consensus outlook seem bearish, with earnings expected to decline by 11% in the upcoming year relative to the past 5-year average growth rate of 21%. With trailing-twelve-month net income at current levels of HK$4.0b, the consensus growth rate suggests that earnings will decline to HK$3.6b by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for K. Wah International Holdings in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for K. Wah International Holdings
Exciting times ahead?
The longer term view from the 2 analysts covering 173 is one of negative sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around 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, 173's earnings should reach HK$3.0b, from current levels of HK$4.0b, resulting in an annual growth rate of -4.3%. EPS reaches HK$0.99 in the final year of forecast compared to the current HK$1.3 EPS today. Contraction in the bottom line seems to suggest cost outpacing top line growth of 0.3% over the next few years. But by the end of 2022, analysts are expecting slower cost growth, resulting in a margin expansion, from the recent 38% to 38%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For K. Wah International Holdings, I've compiled three fundamental 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 K. Wah 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 K. Wah International Holdings is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of K. Wah 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.
