In December 2018, SSY Group Limited (HKG:2005) announced its earnings update. Overall, analysts seem cautiously optimistic, with profits predicted to increase by 29% next year compared with the past 5-year average growth rate of 17%. By 2020, we can expect SSY Group’s bottom line to reach HK$1.2b, a jump from the current trailing-twelve-month of HK$912m. Below is a brief commentary around SSY Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

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Check out our latest analysis for SSY Group

What can we expect from SSY Group in the longer term?

The 6 analysts covering 2005 view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of 2005's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

From the current net income level of HK$912m and the final forecast of HK$1.6b by 2022, the annual rate of growth for 2005’s earnings is 18%. This leads to an EPS of HK$0.53 in the final year of projections relative to the current EPS of HK$0.30. Margins are currently sitting at 22%, which is expected to expand to 25% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For SSY Group, I've put together three relevant aspects you should look at:

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 SSY Group 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 SSY Group is currently mispriced by the market.

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