Ten Pao Group Holdings Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Ten Pao Group Holdings Limited (HKG:1979) investors will be delighted, with the company turning in some strong numbers with its latest results. Ten Pao Group Holdings delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting HK$4.5b, some 15% above indicated. Statutory EPS were HK$0.29, an impressive 26% ahead of forecasts. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Ten Pao Group Holdings

Taking into account the latest results, the consensus forecast from Ten Pao Group Holdings' two analysts is for revenues of HK$5.76b in 2021, which would reflect a huge 28% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 36% to HK$0.39. Before this earnings report, the analysts had been forecasting revenues of HK$4.54b and earnings per share (EPS) of HK$0.28 in 2021. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

It will come as no surprise to learn that the analysts have increased their price target for Ten Pao Group Holdings 33% to HK$2.54on the back of these upgrades.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Ten Pao Group Holdings' growth to accelerate, with the forecast 28% annualised growth to the end of 2021 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ten Pao Group Holdings is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Ten Pao Group Holdings' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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 analyst estimates for Ten Pao Group Holdings going out as far as 2023, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Ten Pao Group Holdings that you should be aware of.

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