China Southern Power Grid Technology Co.,Ltd Recorded A 38% Miss On Revenue: Analysts Are Revisiting Their Models

It's shaping up to be a tough period for China Southern Power Grid Technology Co.,Ltd (SHSE:688248), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. China Southern Power Grid TechnologyLtd delivered a grave earnings miss, with both revenues (CN¥2.5b) and statutory earnings per share (CN¥0.50) falling badly short of analyst expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for China Southern Power Grid TechnologyLtd

Taking into account the latest results, the current consensus from China Southern Power Grid TechnologyLtd's seven analysts is for revenues of CN¥4.67b in 2024. This would reflect a substantial 84% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 71% to CN¥0.85. Before this earnings report, the analysts had been forecasting revenues of CN¥6.23b and earnings per share (EPS) of CN¥1.04 in 2024. Indeed, we can see that the analysts are a lot more bearish about China Southern Power Grid TechnologyLtd's prospects following the latest results, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.3% to CN¥33.76. 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 Southern Power Grid TechnologyLtd analyst has a price target of CN¥37.79 per share, while the most pessimistic values it at CN¥29.72. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. The analysts are definitely expecting China Southern Power Grid TechnologyLtd's growth to accelerate, with the forecast 84% annualised growth to the end of 2024 ranking favourably alongside historical growth of 27% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that China Southern Power Grid TechnologyLtd is expected to grow much faster than its 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 estimates - from multiple China Southern Power Grid TechnologyLtd analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that China Southern Power Grid TechnologyLtd is showing 1 warning sign in our investment analysis , you should know about...

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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.