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On 31 March 2019, Sa Sa International Holdings Limited (HKG:178) announced its latest earnings update. Overall, it seems that analyst forecasts are fairly bearish, with earnings expected to decline by 3.4% in the upcoming year. However, compared to its 5-year track record of the average earnings growth rate of -20%, this is still an improvement. Currently with a trailing-twelve-month profit of HK$472m, the consensus growth rate suggests that earnings will drop to HK$456m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Sa Sa International Holdings in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Sa Sa International Holdings
How is Sa Sa International Holdings going to perform in the near future?
The view from 13 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of 178'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$472m and the final forecast of HK$572m by 2022, the annual rate of growth for 178’s earnings is 6.8%. EPS reaches HK$0.18 in the final year of forecast compared to the current HK$0.15 EPS today. In 2022, 178's profit margin will have expanded from 5.6% to 6.1%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Sa Sa International Holdings, I've compiled three pertinent factors you should look at:
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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.
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Valuation: What is Sa Sa International Holdings 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 Sa Sa International Holdings is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Sa Sa International Holdings? 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.