Shareholders might have noticed that Hainan Meilan International Airport Company Limited (HKG:357) filed its half-yearly result this time last week. The early response was not positive, with shares down 5.0% to HK$7.40 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at CN¥1.1b, statutory losses exploded to CN¥0.11 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Hainan Meilan International Airport
Taking into account the latest results, the most recent consensus for Hainan Meilan International Airport from nine analysts is for revenues of CN¥2.25b in 2023. If met, it would imply a huge 42% increase on its revenue over the past 12 months. Hainan Meilan International Airport is also expected to turn profitable, with statutory earnings of CN¥1.06 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.21b and earnings per share (EPS) of CN¥0.93 in 2023. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.
The consensus price target fell 17% to HK$16.20, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. 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. There are some variant perceptions on Hainan Meilan International Airport, with the most bullish analyst valuing it at HK$29.87 and the most bearish at HK$7.70 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Hainan Meilan International Airport's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 101% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 4.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.2% annually. So it looks like Hainan Meilan International Airport is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hainan Meilan International Airport following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to 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.
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 Hainan Meilan International Airport going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Hainan Meilan International Airport you should be aware 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.