Hang Lung Properties Limited Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

The full-year results for Hang Lung Properties Limited (HKG:101) were released last week, making it a good time to revisit its performance. It was a pretty negative result overall, with revenues of HK$8.9b missing analyst predictions by 2.3%. Worse, the business reported a statutory loss of HK$0.57 per share, a substantial decline on analyst expectations of a profit. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Hang Lung Properties

Taking into account the latest results, the consensus forecast from Hang Lung Properties' twelve analysts is for revenues of HK$10.3b in 2021, which would reflect a solid 16% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Hang Lung Properties forecast to report a statutory profit of HK$1.09 per share. Before this earnings report, the analysts had been forecasting revenues of HK$10.4b and earnings per share (EPS) of HK$1.11 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of HK$23.66, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Hang Lung Properties at HK$27.00 per share, while the most bearish prices it at HK$19.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Hang Lung Properties' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 16%, well above its historical decline of 6.5% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 16% next year. So while Hang Lung Properties' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Hang Lung Properties analysts - going out to 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Hang Lung Properties that you should be aware of.

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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. 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.
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