Wharf Real Estate Investment (SEHK:1997) Stock Valuation, Peer Comparison & Price Targets

Q: What is the Fair Price of 1997 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

1997 (HK$21.05) is trading below our estimate of [[fair value]] (HK$30.85)

Share Price vs Fair Value

What is the Fair Price of 1997 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1997 (HK$21.05) is trading below our estimate of fair value (HK$30.85)

Significantly Below Fair Value: 1997 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 1997?

Key metric: As 1997 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for 1997. This is calculated by dividing 1997's market cap by their current earnings.
What is 1997's PE Ratio?
PE Ratio	33.5x
Earnings	HK$1.91b
Market Cap	HK$63.91b

1997 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	8x
Enterprise Value/EBITDA	10.4x
PEG Ratio	1.4x

Price to Earnings Ratio vs Peers

How does 1997's PE Ratio compare to its peers?

The above table shows the PE ratio for 1997 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	21.6x
1972 Swire Properties	42.7x	25.6%	HK$94.4b
1209 China Resources Mixc Lifestyle Services	18.5x	14.5%	HK$68.2b
101 Hang Lung Properties	11.6x	13.2%	HK$30.7b
2602 Onewo	13.7x	12.9%	HK$25.4b
1997 Wharf Real Estate Investment	33.5x	23.1%	HK$63.9b

Price-To-Earnings vs Peers: 1997 is expensive based on its Price-To-Earnings Ratio (33.5x) compared to the peer average (21.6x).

Price to Earnings Ratio vs Industry

How does 1997's PE Ratio compare vs other companies in the HK Real Estate Industry?

6 Companies	Price / Earnings	Estimated Growth	Market Cap
29 Dynamic Holdings	0.3x	n/a	US$229.97m
2768 Jiayuan International Group	1.4x	31.6%	US$151.18m
3883 China Aoyuan Group	0.07x	n/a	US$143.57m
2117 Datang Group Holdings	1.2x	n/a	US$87.18m

6 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: 1997 is expensive based on its Price-To-Earnings Ratio (33.5x) compared to the Hong Kong Real Estate industry average (7.4x).

Price to Earnings Ratio vs Fair Ratio

What is 1997's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

1997 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	33.5x
Fair PE Ratio	15.6x

Price-To-Earnings vs Fair Ratio: 1997 is expensive based on its Price-To-Earnings Ratio (33.5x) compared to the estimated Fair Price-To-Earnings Ratio (15.6x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst 1997 forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	HK$21.05	HK$26.16 +24.3%	19.1%	HK$33.00	HK$17.00	n/a	15
Nov ’25	HK$23.05	HK$26.16 +13.5%	19.1%	HK$33.00	HK$17.00	n/a	15
Oct ’25	HK$27.50	HK$25.34 -7.9%	16.3%	HK$31.00	HK$17.00	n/a	15
Sep ’25	HK$22.75	HK$25.07 +10.2%	16.8%	HK$31.00	HK$17.00	n/a	15
Aug ’25	HK$19.60	HK$29.13 +48.6%	23.0%	HK$46.00	HK$17.00	n/a	15
Jul ’25	HK$20.70	HK$31.71 +53.2%	17.0%	HK$46.00	HK$22.00	n/a	15
Jun ’25	HK$22.65	HK$31.71 +40.0%	17.0%	HK$46.00	HK$22.00	n/a	15
May ’25	HK$24.45	HK$32.52 +33.0%	16.1%	HK$46.00	HK$22.00	n/a	15
Apr ’25	HK$25.45	HK$32.79 +28.8%	14.2%	HK$46.00	HK$26.70	n/a	15
Mar ’25	HK$25.25	HK$34.51 +36.7%	21.7%	HK$48.60	HK$26.11	n/a	16
Feb ’25	HK$23.80	HK$35.19 +47.8%	24.1%	HK$48.60	HK$23.00	n/a	15
Jan ’25	HK$26.40	HK$40.21 +52.3%	23.5%	HK$59.50	HK$23.00	n/a	15
Dec ’24	HK$24.80	HK$41.87 +68.8%	19.8%	HK$59.50	HK$23.00	n/a	15
Nov ’24	HK$27.25	HK$42.97 +57.7%	17.8%	HK$59.50	HK$23.00	HK$23.05	15
Oct ’24	HK$30.25	HK$43.96 +45.3%	16.7%	HK$59.50	HK$27.00	HK$27.50	16
Sep ’24	HK$32.70	HK$44.50 +36.1%	15.6%	HK$59.50	HK$27.00	HK$22.75	17
Aug ’24	HK$41.80	HK$48.43 +15.9%	10.3%	HK$60.50	HK$40.00	HK$19.60	17
Jul ’24	HK$39.15	HK$48.93 +25.0%	10.4%	HK$60.50	HK$40.00	HK$20.70	17
Jun ’24	HK$38.25	HK$49.16 +28.5%	10.5%	HK$60.50	HK$40.00	HK$22.65	17
May ’24	HK$45.10	HK$49.08 +8.8%	11.6%	HK$60.50	HK$37.00	HK$24.45	16
Apr ’24	HK$45.10	HK$48.82 +8.2%	12.0%	HK$60.50	HK$37.00	HK$25.45	16
Mar ’24	HK$43.40	HK$46.47 +7.1%	12.4%	HK$54.00	HK$37.00	HK$25.25	15
Feb ’24	HK$44.85	HK$45.31 +1.0%	13.7%	HK$53.90	HK$31.00	HK$23.80	14
Jan ’24	HK$45.50	HK$41.64 -8.5%	19.8%	HK$53.90	HK$24.30	HK$26.40	14
Dec ’23	HK$36.20	HK$38.11 +5.3%	17.8%	HK$48.40	HK$24.30	HK$24.80	14
Nov ’23	HK$32.30	HK$38.85 +20.3%	16.6%	HK$48.40	HK$24.30	HK$27.25	14

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Wharf Real Estate Investment Valuation