SSY Group Limited (HKG:2005) Just Released Its Annual Earnings: Here's What Analysts Think

Shareholders of SSY Group Limited (HKG:2005) will be pleased this week, given that the stock price is up 10% to HK$5.16 following its latest annual results. Revenues came in 3.8% below expectations, at HK$6.5b. Statutory earnings per share were relatively better off, with a per-share profit of HK$0.44 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for SSY Group

Taking into account the latest results, the most recent consensus for SSY Group from four analysts is for revenues of HK$7.95b in 2024. If met, it would imply a substantial 23% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 22% to HK$0.54. In the lead-up to this report, the analysts had been modelling revenues of HK$7.99b and earnings per share (EPS) of HK$0.57 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at HK$6.09, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values SSY Group at HK$6.48 per share, while the most bearish prices it at HK$5.70. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that SSY Group's rate of growth is expected to accelerate meaningfully, with the forecast 23% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SSY Group to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SSY Group. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at HK$6.09, with the latest estimates not enough to have an impact on their price targets.

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. We have forecasts for SSY Group going out to 2026, and you can see them free on our platform here.

You can also view our analysis of SSY Group's balance sheet, and whether we think SSY Group is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.