Earnings Update: Luk Fook Holdings (International) Limited (HKG:590) Just Reported And Analysts Are Trimming Their Forecasts

Shareholders might have noticed that Luk Fook Holdings (International) Limited (HKG:590) filed its yearly result this time last week. The early response was not positive, with shares down 6.1% to HK$16.24 in the past week. It was a credible result overall, with revenues of HK$15b and statutory earnings per share of HK$3.01 both in line with analyst estimates, showing that Luk Fook Holdings (International) is executing in line with expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Luk Fook Holdings (International)

Following last week's earnings report, Luk Fook Holdings (International)'s nine analysts are forecasting 2025 revenues to be HK$15.3b, approximately in line with the last 12 months. Statutory earnings per share are forecast to shrink 6.0% to HK$2.83 in the same period. Before this earnings report, the analysts had been forecasting revenues of HK$17.3b and earnings per share (EPS) of HK$3.40 in 2025. Indeed, we can see that the analysts are a lot more bearish about Luk Fook Holdings (International)'s prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 14% to HK$23.49. 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 Luk Fook Holdings (International) at HK$30.00 per share, while the most bearish prices it at HK$19.55. 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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.03% by the end of 2025. This indicates a significant reduction from annual growth of 1.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. It's pretty clear that Luk Fook Holdings (International)'s revenues are expected to perform substantially worse 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Luk Fook Holdings (International) going out to 2027, 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 1 warning sign for Luk Fook Holdings (International) 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com