Yuexiu Property Company Limited Just Missed EPS By 20%: Here's What Analysts Think Will Happen Next

Yuexiu Property Company Limited (HKG:123) shareholders are probably feeling a little disappointed, since its shares fell 6.3% to HK$7.39 in the week after its latest annual results. Statutory earnings per share of CN¥1.16 unfortunately missed expectations by 20%, although it was encouraging to see revenues of CN¥57b exceed expectations by 6.1%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Yuexiu Property

Taking into account the latest results, the current consensus from Yuexiu Property's ten analysts is for revenues of CN¥67.3b in 2022, which would reflect a meaningful 17% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 22% to CN¥1.41. Before this earnings report, the analysts had been forecasting revenues of CN¥63.3b and earnings per share (EPS) of CN¥1.59 in 2022. So it's pretty clear the analysts have mixed opinions on Yuexiu Property after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.

The consensus price target was unchanged at HK$10.16, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Yuexiu Property at HK$11.60 per share, while the most bearish prices it at HK$9.48. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Yuexiu Property'shistorical trends, as the 17% annualised revenue growth to the end of 2022 is roughly in line with the 19% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 13% annually. So although Yuexiu Property is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Yuexiu Property. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Yuexiu Property going out to 2024, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for Yuexiu Property that you need to be mindful of.

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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.