Looking at Sino-Ocean Group Holding Limited's (HKG:3377) earnings update in December 2018, analysts seem fairly confident, as a 17% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 3.2%. Currently with trailing-twelve-month earnings of CN¥3.6b, we can expect this to reach CN¥4.2b by 2020. Below is a brief commentary around Sino-Ocean Group Holding's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Sino-Ocean Group Holding in the longer term?
Over the next three years, it seems the consensus view of the 15 analysts covering 3377 is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for 3377, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 17% based on the most recent earnings level of CN¥3.6b to the final forecast of CN¥6.0b by 2022. EPS reaches CN¥0.80 in the final year of forecast compared to the current CN¥0.47 EPS today. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 8.6% to 7.8% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Sino-Ocean Group Holding, I've put together three essential aspects you should further research:
- 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 Sino-Ocean Group Holding 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 Sino-Ocean Group Holding is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Sino-Ocean Group Holding? 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 email@example.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.