Poly Property Services Co., Ltd. (HKG:6049) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥15b, statutory earnings were in line with expectations, at CN¥2.51 per share. 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. 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 most recent consensus for Poly Property Services from 20 analysts is for revenues of CN¥17.5b in 2024. If met, it would imply a notable 16% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 15% to CN¥2.89. In the lead-up to this report, the analysts had been modelling revenues of CN¥19.1b and earnings per share (EPS) of CN¥2.99 in 2024. 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.
It'll come as no surprise then, to learn that the analysts have cut their price target 9.8% to HK$42.13. 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. The most optimistic Poly Property Services analyst has a price target of HK$63.58 per share, while the most pessimistic values it at HK$32.46. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Poly Property Services' revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2024 being well below the historical 24% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.0% annually. Even after the forecast slowdown in growth, it seems obvious that Poly Property Services 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 Poly Property Services. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 Poly Property Services' 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. At Simply Wall St, we have a full range of analyst estimates for Poly Property Services going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Poly Property Services , and understanding it should be part of your investment process.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.