Poly Property Services Co., Ltd. (HKG:6049) just released its interim report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.3% to hit CN¥7.9b. Poly Property Services also reported a statutory profit of CN¥1.54, which was an impressive 24% above what the analysts had forecast. 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.
Check out our latest analysis for Poly Property Services
Taking into account the latest results, the most recent consensus for Poly Property Services from 22 analysts is for revenues of CN¥16.7b in 2024. If met, it would imply a modest 5.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 3.3% to CN¥2.75. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥17.1b and earnings per share (EPS) of CN¥2.87 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The consensus price target fell 5.6% to HK$38.83, 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. The most optimistic Poly Property Services analyst has a price target of HK$64.66 per share, while the most pessimistic values it at HK$30.41. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's pretty clear that there is an expectation that Poly Property Services' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% annually. So it's pretty clear that, while Poly Property Services' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Poly Property Services. They also downgraded Poly Property Services' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. 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.
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 Poly Property Services going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Poly Property Services that we have uncovered.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.