China Railway Construction Corporation Limited Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, China Railway Construction Corporation Limited (SHSE:601186) last week released its latest full-year, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥1.1t, statutory earnings missed forecasts by 14%, coming in at just CN¥1.46 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on China Railway Construction after the latest results.

Taking into account the latest results, the most recent consensus for China Railway Construction from nine analysts is for revenues of CN¥1.10t in 2025. If met, it would imply a satisfactory 3.0% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be CN¥1.62, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.13t and earnings per share (EPS) of CN¥1.72 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

See our latest analysis for China Railway Construction

What's most unexpected is that the consensus price target rose 5.8% to CN¥11.58, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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 China Railway Construction at CN¥13.00 per share, while the most bearish prices it at CN¥10.79. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that China Railway Construction's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.0% growth on an annualised basis. This is compared to a historical growth rate of 5.7% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that China Railway Construction is also expected to grow slower than other industry participants.

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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on China Railway Construction. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for China Railway Construction going out to 2027, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with China Railway Construction (including 1 which is concerning) .

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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.