It's shaping up to be a tough period for China Overseas Property Holdings Limited (HKG:2669), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 3.7% short of analyst estimates at CN¥14b, and statutory earnings of CN¥0.46 per share missed forecasts by 2.3%. 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.
Taking into account the latest results, the current consensus from China Overseas Property Holdings' 17 analysts is for revenues of CN¥15.2b in 2025. This would reflect a notable 8.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 9.6% to CN¥0.50. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥16.2b and earnings per share (EPS) of CN¥0.53 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Check out our latest analysis for China Overseas Property Holdings
Despite the cuts to forecast earnings, there was no real change to the HK$6.22 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values China Overseas Property Holdings at HK$7.74 per share, while the most bearish prices it at HK$4.70. 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.
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 China Overseas Property Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.7% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.9% per year. Even after the forecast slowdown in growth, it seems obvious that China Overseas Property Holdings is also expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Overseas Property Holdings. They also downgraded China Overseas Property Holdings' 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$6.22, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on China Overseas Property Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for China Overseas Property Holdings going out to 2027, and you can see them free on our platform here.
You can also see our analysis of China Overseas Property Holdings' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.