What Should Investors Know About China Traditional Chinese Medicine Holdings Co. Limited’s (HKG:570) Growth?
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After China Traditional Chinese Medicine Holdings Co. Limited’s (HKG:570) earnings announcement in June 2018, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 24% next year, though this is noticeably lower than the previous 5-year average earnings growth of 36%. Currently with trailing-twelve-month earnings of CN¥1.2b, we can expect this to reach CN¥1.5b by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for China Traditional Chinese Medicine Holdings in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for China Traditional Chinese Medicine Holdings
Exciting times ahead?
Over the next three years, it seems the consensus view of the 17 analysts covering 570 is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of 570’s earnings growth over these next few years.
By 2022, 570’s earnings should reach CN¥2.3b, from current levels of CN¥1.2b, resulting in an annual growth rate of 20%. EPS reaches CN¥0.45 in the final year of forecast compared to the current CN¥0.26 EPS today. In 2022, 570’s profit margin will have expanded from 14% to 15%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For China Traditional Chinese Medicine Holdings, there are three pertinent 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 China Traditional Chinese Medicine 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 Traditional Chinese Medicine Holdings is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Traditional Chinese Medicine 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!
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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. On rare occasion, data errors may occur. Thank you for reading.
