Investors in Sino Land Company Limited (HKG:83) had a good week, as its shares rose 4.9% to close at HK$8.50 following the release of its half-yearly results. It was a workmanlike result, with revenues of HK$4.9b coming in 5.5% ahead of expectations, and statutory earnings per share of HK$0.31, in line with analyst appraisals. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the ten analysts covering Sino Land, is for revenues of HK$9.46b in 2024. This implies an uneasy 9.2% reduction in Sino Land's revenue over the past 12 months. Statutory earnings per share are forecast to dip 8.6% to HK$0.64 in the same period. Before this earnings report, the analysts had been forecasting revenues of HK$10.4b and earnings per share (EPS) of HK$0.69 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
The analysts made no major changes to their price target of HK$10.12, suggesting the downgrades are not expected to have a long-term impact on Sino Land's valuation. 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. Currently, the most bullish analyst values Sino Land at HK$11.40 per share, while the most bearish prices it at HK$9.10. This is a very narrow spread of estimates, implying either that Sino Land is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 18% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.8% per year. It's pretty clear that Sino Land's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at HK$10.12, 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 Sino Land going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Sino Land that 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.