Hutchison Telecommunications Hong Kong Holdings Limited (HKG:215) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues fell 6.9% short of expectations, at HK$4.9b. Earnings correspondingly dipped, with Hutchison Telecommunications Hong Kong Holdings reporting a statutory loss of HK$0.011 per share, whereas the analysts had previously modelled a profit in this period. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Hutchison Telecommunications Hong Kong Holdings' four analysts is for revenues of HK$5.07b in 2024. This reflects a modest 3.5% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Hutchison Telecommunications Hong Kong Holdings forecast to report a statutory profit of HK$0.021 per share. Before this earnings report, the analysts had been forecasting revenues of HK$5.41b and earnings per share (EPS) of HK$0.034 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.
Despite the cuts to forecast earnings, there was no real change to the HK$1.31 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Hutchison Telecommunications Hong Kong Holdings at HK$1.50 per share, while the most bearish prices it at HK$1.10. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Hutchison Telecommunications Hong Kong Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.5% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 7.0% 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 5.5% annually for the foreseeable future. Although Hutchison Telecommunications Hong Kong Holdings' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hutchison Telecommunications Hong Kong Holdings. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at HK$1.31, 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 Hutchison Telecommunications Hong Kong Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hutchison Telecommunications Hong Kong Holdings analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Hutchison Telecommunications Hong Kong Holdings 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.