Wharf Real Estate Investment Company Limited

SHSC:1997 Stock Report

Market Cap: HK$64.4b

Wharf Real Estate Investment Valuation

Is 1997 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

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$21.2) is trading below our estimate of fair value (HK$30.97)

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 Ratio33.7x
EarningsHK$1.91b
Market CapHK$64.37b

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.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average21.5x
1972 Swire Properties
42.2x25.6%HK$93.3b
1209 China Resources Mixc Lifestyle Services
18.6x14.3%HK$68.7b
101 Hang Lung Properties
11.5x13.2%HK$30.4b
2602 Onewo
13.8x13.6%HK$25.6b
1997 Wharf Real Estate Investment
33.7x23.1%HK$64.4b

Price-To-Earnings vs Peers: 1997 is expensive based on its Price-To-Earnings Ratio (33.7x) compared to the peer average (21.5x).

Price to Earnings Ratio vs Industry

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

6 CompaniesPrice / EarningsEstimated GrowthMarket Cap
29 Dynamic Holdings
0.3xn/aUS$226.00m
3883 China Aoyuan Group
0.07xn/aUS$158.42m
2768 Jiayuan International Group
1.4x31.6%US$151.18m
2117 Datang Group Holdings
1.2xn/aUS$87.18m
1997 33.7xIndustry Avg. 7.2xNo. of Companies16PE0612182430+
6 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: 1997 is expensive based on its Price-To-Earnings Ratio (33.7x) compared to the Hong Kong Real Estate industry average (7.2x).

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 Ratio33.7x
Fair PE Ratio15.6x

Price-To-Earnings vs Fair Ratio: 1997 is expensive based on its Price-To-Earnings Ratio (33.7x) 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.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentHK$21.20
HK$26.16
+23.4%
19.1%HK$33.00HK$17.00n/a15
Nov ’25HK$23.05
HK$26.16
+13.5%
19.1%HK$33.00HK$17.00n/a15
Oct ’25HK$27.50
HK$25.34
-7.9%
16.3%HK$31.00HK$17.00n/a15
Sep ’25HK$22.75
HK$25.07
+10.2%
16.8%HK$31.00HK$17.00n/a15
Aug ’25HK$19.60
HK$29.13
+48.6%
23.0%HK$46.00HK$17.00n/a15
Jul ’25HK$20.70
HK$31.71
+53.2%
17.0%HK$46.00HK$22.00n/a15
Jun ’25HK$22.65
HK$31.71
+40.0%
17.0%HK$46.00HK$22.00n/a15
May ’25HK$24.45
HK$32.52
+33.0%
16.1%HK$46.00HK$22.00n/a15
Apr ’25HK$25.45
HK$32.79
+28.8%
14.2%HK$46.00HK$26.70n/a15
Mar ’25HK$25.25
HK$34.51
+36.7%
21.7%HK$48.60HK$26.11n/a16
Feb ’25HK$23.80
HK$35.19
+47.8%
24.1%HK$48.60HK$23.00n/a15
Jan ’25HK$26.40
HK$40.21
+52.3%
23.5%HK$59.50HK$23.00n/a15
Dec ’24HK$24.80
HK$41.87
+68.8%
19.8%HK$59.50HK$23.00n/a15
Nov ’24HK$27.25
HK$42.97
+57.7%
17.8%HK$59.50HK$23.00HK$23.0515
Oct ’24HK$30.25
HK$43.96
+45.3%
16.7%HK$59.50HK$27.00HK$27.5016
Sep ’24HK$32.70
HK$44.50
+36.1%
15.6%HK$59.50HK$27.00HK$22.7517
Aug ’24HK$41.80
HK$48.43
+15.9%
10.3%HK$60.50HK$40.00HK$19.6017
Jul ’24HK$39.15
HK$48.93
+25.0%
10.4%HK$60.50HK$40.00HK$20.7017
Jun ’24HK$38.25
HK$49.16
+28.5%
10.5%HK$60.50HK$40.00HK$22.6517
May ’24HK$45.10
HK$49.08
+8.8%
11.6%HK$60.50HK$37.00HK$24.4516
Apr ’24HK$45.10
HK$48.82
+8.2%
12.0%HK$60.50HK$37.00HK$25.4516
Mar ’24HK$43.40
HK$46.47
+7.1%
12.4%HK$54.00HK$37.00HK$25.2515
Feb ’24HK$44.85
HK$45.31
+1.0%
13.7%HK$53.90HK$31.00HK$23.8014
Jan ’24HK$45.50
HK$41.64
-8.5%
19.8%HK$53.90HK$24.30HK$26.4014
Dec ’23HK$36.20
HK$38.11
+5.3%
17.8%HK$48.40HK$24.30HK$24.8014
Nov ’23HK$32.30
HK$38.85
+20.3%
16.6%HK$48.40HK$24.30HK$27.2514

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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