Analyst Estimates: Here's What Brokers Think Of SSY Group Limited (HKG:2005) After Its Full-Year Report
SSY Group Limited (HKG:2005) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. SSY Group missed revenue estimates by 2.2%, with sales of HK$4.6b, although statutory earnings per share (EPS) of HK$0.37 beat expectations, coming in 2.8% ahead of analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for SSY Group
Taking into account the latest results, the consensus forecast from SSY Group's six analysts is for revenues of HK$5.35b in 2020, which would reflect a notable 15% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to grow 14% to HK$0.43. In the lead-up to this report, the analysts had been modelling revenues of HK$5.36b and earnings per share (EPS) of HK$0.44 in 2020. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at HK$7.96, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values SSY Group at HK$8.30 per share, while the most bearish prices it at HK$7.49. This is a very narrow spread of estimates, implying either that SSY Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of SSY Group'shistorical trends, as next year's 15% revenue growth is roughly in line with 19% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% next year. It's clear that while SSY Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on SSY Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for SSY Group going out to 2022, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for SSY Group (1 is concerning!) that we have uncovered.
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