China Overseas Property Holdings Limited (HKG:2669) Full-Year Results Just Came Out: Here's What Analysts Are Forecasting For This Year

The investors in China Overseas Property Holdings Limited's (HKG:2669) will be rubbing their hands together with glee today, after the share price leapt 21% to HK$6.99 in the week following its full-year results. Results look mixed - while revenue fell marginally short of analyst estimates at HK$6.5b, statutory earnings beat expectations 4.9%, with China Overseas Property Holdings reporting profits of HK$0.21 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for China Overseas Property Holdings

Taking into account the latest results, the current consensus from China Overseas Property Holdings' 16 analysts is for revenues of HK$8.77b in 2021, which would reflect a sizeable 34% increase on its sales over the past 12 months. Per-share earnings are expected to surge 28% to HK$0.27. In the lead-up to this report, the analysts had been modelling revenues of HK$8.65b and earnings per share (EPS) of HK$0.26 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at HK$7.27, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic China Overseas Property Holdings analyst has a price target of HK$9.42 per share, while the most pessimistic values it at HK$4.40. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Overseas Property Holdings' past performance and to peers in the same industry. The analysts are definitely expecting China Overseas Property Holdings' growth to accelerate, with the forecast 34% annualised growth to the end of 2021 ranking favourably alongside historical growth of 18% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that China Overseas Property Holdings is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards China Overseas Property Holdings following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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 China Overseas Property Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple China Overseas Property Holdings analysts - going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for China Overseas Property Holdings 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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