What You Need To Know About The Sino Land Company Limited (HKG:83) Analyst Downgrade Today

The analysts covering Sino Land Company Limited (HKG:83) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Sino Land's twelve analysts is for revenues of HK$25b in 2021 which - if met - would reflect a sizeable 271% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 4,796% to HK$1.35. Before this latest update, the analysts had been forecasting revenues of HK$27b and earnings per share (EPS) of HK$1.42 in 2021. It's pretty clear that analyst sentiment has fallen after the recent consensus updates, leading to lower revenue forecasts and a small dip in earnings per share estimates.

View our latest analysis for Sino Land

Analysts made no major changes to their price target of HK$12.57, suggesting the downgrades are not expected to have a long-term impact on Sino Land's valuation. 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 Sino Land analyst has a price target of HK$15.20 per share, while the most pessimistic values it at HK$9.10. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Sino Land is forecast to grow faster in the future than it has in the past, with revenues expected to display 13x annualised growth until the end of 2021. If achieved, this would be a much better result than the 22% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 16% per year. So it looks like Sino Land is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Sino Land going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Sino Land going out to 2023, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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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