Advertisement
Canada markets close in 2 hours 58 minutes
  • S&P/TSX

    22,178.17
    +71.09 (+0.32%)
     
  • S&P 500

    5,250.52
    +2.03 (+0.04%)
     
  • DOW

    39,773.30
    +13.22 (+0.03%)
     
  • CAD/USD

    0.7390
    +0.0018 (+0.24%)
     
  • CRUDE OIL

    82.77
    +1.42 (+1.75%)
     
  • Bitcoin CAD

    95,740.62
    +2,062.52 (+2.20%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,241.10
    +28.40 (+1.28%)
     
  • RUSSELL 2000

    2,128.80
    +14.45 (+0.68%)
     
  • 10-Yr Bond

    4.1910
    -0.0050 (-0.12%)
     
  • NASDAQ

    16,374.10
    -25.42 (-0.16%)
     
  • VOLATILITY

    12.97
    +0.19 (+1.49%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6837
    +0.0032 (+0.47%)
     

What Should We Expect From Geely Automobile Holdings Limited's (HKG:175) Earnings In The Years Ahead?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Geely Automobile Holdings Limited's (HKG:175) most recent earnings announcement in April 2019 revealed that the business benefited from a strong tailwind, leading to a double-digit earnings growth of 18%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Geely Automobile Holdings's earnings growth outlook over the next couple of 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 Geely Automobile Holdings

ADVERTISEMENT

Market analysts' consensus outlook for next year seems rather muted, with earnings increasing by a single digit 1.4%. The growth outlook in the following year seems much more buoyant with rates arriving at double digit 16% compared to today’s earnings, and finally hitting CN¥16b by 2022.

SEHK:175 Past and Future Earnings, June 28th 2019
SEHK:175 Past and Future Earnings, June 28th 2019

Even though it’s helpful to understand the growth each year relative to today’s value, it may be more valuable to gauge the rate at which the business is rising or falling every year, on average. The pro of this approach is that we can get a bigger picture of the direction of Geely Automobile Holdings's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate 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 8.4%. This means that, we can anticipate Geely Automobile Holdings will grow its earnings by 8.4% every year for the next few years.

Next Steps:

For Geely Automobile Holdings, I've put together three relevant aspects you should further research:

  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 175 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 175 is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 175? 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.