Hainan Meilan International Airport Company Limited (HKG:357) Just Reported And Analysts Have Been Cutting Their Estimates

Last week, you might have seen that Hainan Meilan International Airport Company Limited (HKG:357) released its interim result to the market. The early response was not positive, with shares down 2.4% to HK$7.17 in the past week. Revenues were CN¥1.1b, with Hainan Meilan International Airport reporting some 7.6% below analyst expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hainan Meilan International Airport after the latest results.

View our latest analysis for Hainan Meilan International Airport

Taking into account the latest results, the consensus forecast from Hainan Meilan International Airport's five analysts is for revenues of CN¥2.31b in 2024. This reflects a credible 6.4% improvement in revenue compared to the last 12 months. Per-share statutory losses are expected to explode, reaching CN¥0.43 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.51b and earnings per share (EPS) of CN¥0.33 in 2024. There looks to have been a significant drop in sentiment regarding Hainan Meilan International Airport's prospects after these latest results, with a minor downgrade to revenues and the analysts now forecasting a loss instead of a profit.

There was no major change to the consensus price target of HK$9.59, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Hainan Meilan International Airport at HK$13.89 per share, while the most bearish prices it at HK$6.20. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Hainan Meilan International Airport's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Hainan Meilan International Airport to grow faster than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Hainan Meilan International Airport dropped from profits to a loss next year. They also downgraded Hainan Meilan International Airport's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at HK$9.59, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Hainan Meilan International Airport going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Hainan Meilan International Airport , and understanding this should be part of your investment process.

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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.