China Merchants Property Operation & Service Co., Ltd. (SZSE:001914) Analysts Are Pretty Bullish On The Stock After Recent Results

Shareholders of China Merchants Property Operation & Service Co., Ltd. (SZSE:001914) will be pleased this week, given that the stock price is up 16% to CN¥12.15 following its latest annual results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥17b, statutory earnings beat expectations 4.6%, with China Merchants Property Operation & Service reporting profits of CN¥0.79 per share. 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 China Merchants Property Operation & Service

Taking into account the latest results, the current consensus from China Merchants Property Operation & Service's eleven analysts is for revenues of CN¥18.6b in 2025. This would reflect a meaningful 8.6% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 11% to CN¥0.88. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥19.8b and earnings per share (EPS) of CN¥0.86 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The average price target increased 9.4% to CN¥12.88, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on China Merchants Property Operation & Service, with the most bullish analyst valuing it at CN¥16.10 and the most bearish at CN¥9.40 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that China Merchants Property Operation & Service's revenue growth is expected to slow, with the forecast 8.6% annualised growth rate until the end of 2025 being well below the historical 19% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.7% per year. So it's pretty clear that, while China Merchants Property Operation & Service's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards China Merchants Property Operation & Service following these results. They also downgraded China Merchants Property Operation & Service's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for China Merchants Property Operation & Service going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for China Merchants Property Operation & Service that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.