Yahoo Finance What Should Investors Know About K. Wah International Holdings Limited's (HKG:173) Future?
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K. Wah International Holdings Limited's (HKG:173) announced its latest earnings update in December 2018, which suggested that the company gained from a small tailwind, eventuating to a single-digit earnings growth of 3.6%. Below is a brief commentary on my key takeaways on how market analysts predict K. Wah International Holdings's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for K. Wah International Holdings
Market analysts' consensus outlook for this coming year seems pessimistic, with earnings reducing by a double-digit -11%. However, the following year seems to show a complete contrast, with earnings expected to grow at a double digit 23% relative to the most recent earnings level in 2019, reaching HK$5.0b, before reducing. in 2022.
Although it’s informative understanding the growth each year relative to today’s value, it may be more valuable evaluating the rate at which the company is rising or falling on average every year. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of K. Wah International Holdings's earnings trajectory over time, be more volatile. To compute this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -4.3%. This means that, we can presume K. Wah International Holdings will chip away at a rate of -4.3% every year for the next couple of years.
Next Steps:
For K. Wah International Holdings, there are three pertinent aspects 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 173 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 173 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 173? 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. Thank you for reading.
