Hainan Meilan International Airport Company Limited Just Beat EPS By 40%: Here's What Analysts Think Will Happen Next

As you might know, Hainan Meilan International Airport Company Limited (HKG:357) recently reported its annual numbers. Revenues of CN¥1.6b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥1.62 an impressive 40% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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¥1.88b in 2022, which would reflect a solid 17% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to plummet 34% to CN¥1.07 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.23b and earnings per share (EPS) of CN¥1.18 in 2022. Indeed, we can see that sentiment has declined measurably after results came out, with a real cut to revenue estimates and a minor downgrade to EPS estimates to boot.

The consensus price target fell 7.9% to HK$35.73, with the weaker earnings outlook clearly leading valuation estimates. 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 Hainan Meilan International Airport at HK$46.56 per share, while the most bearish prices it at HK$29.90. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hainan Meilan International Airport's past performance and to peers in the same industry. The analysts are definitely expecting Hainan Meilan International Airport's growth to accelerate, with the forecast 17% annualised growth to the end of 2022 ranking favourably alongside historical growth of 2.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Hainan Meilan International Airport is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hainan Meilan International Airport. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Hainan Meilan International Airport's future valuation.

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 estimates - from multiple Hainan Meilan International Airport analysts - going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Hainan Meilan International Airport that you need to take into consideration.

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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.