China National Chemical Engineering Co., Ltd (SHSE:601117) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

The first-quarter results for China National Chemical Engineering Co., Ltd (SHSE:601117) were released last week, making it a good time to revisit its performance. Results were roughly in line with estimates, with revenues of CN¥45b and statutory earnings per share of CN¥0.89. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for China National Chemical Engineering

Taking into account the latest results, the most recent consensus for China National Chemical Engineering from nine analysts is for revenues of CN¥197.4b in 2024. If met, it would imply a meaningful 9.2% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 7.5% to CN¥0.97. In the lead-up to this report, the analysts had been modelling revenues of CN¥203.7b and earnings per share (EPS) of CN¥1.15 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The analysts made no major changes to their price target of CN¥10.91, suggesting the downgrades are not expected to have a long-term impact on China National Chemical Engineering's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic China National Chemical Engineering analyst has a price target of CN¥14.00 per share, while the most pessimistic values it at CN¥8.71. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that China National Chemical Engineering's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 16% 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) 10% annually. Factoring in the forecast slowdown in growth, it looks like China National Chemical Engineering is forecast to grow at about the same rate as 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 National Chemical Engineering. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at CN¥10.91, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for China National Chemical Engineering 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 China National Chemical Engineering , and understanding it should be part of your investment process.

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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.