Last week saw the newest full-year earnings release from HK Electric Investments and HK Electric Investments Limited (HKG:2638), an important milestone in the company's journey to build a stronger business. HK Electric Investments and HK Electric Investments reported in line with analyst predictions, delivering revenues of HK$12b and statutory earnings per share of HK$0.35, suggesting the business is executing well and in line with its plan. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for HK Electric Investments and HK Electric Investments
Taking into account the latest results, the current consensus from HK Electric Investments and HK Electric Investments' five analysts is for revenues of HK$12.4b in 2025. This would reflect an okay 3.1% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 5.8% to HK$0.37. In the lead-up to this report, the analysts had been modelling revenues of HK$12.4b and earnings per share (EPS) of HK$0.37 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$6.34. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on HK Electric Investments and HK Electric Investments, with the most bullish analyst valuing it at HK$7.00 and the most bearish at HK$5.80 per share. This is a very narrow spread of estimates, implying either that HK Electric Investments and HK Electric Investments is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the HK Electric Investments and HK Electric Investments' past performance and to peers in the same industry. It's clear from the latest estimates that HK Electric Investments and HK Electric Investments' rate of growth is expected to accelerate meaningfully, with the forecast 3.1% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 5.7% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, HK Electric Investments and HK Electric Investments is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at HK$6.34, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for HK Electric Investments and HK Electric Investments 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 2 warning signs for HK Electric Investments and HK Electric Investments (1 makes us a bit uncomfortable!) 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.