Beijing SinoHytec Co., Ltd. (SHSE:688339) Analysts Are Reducing Their Forecasts For This Year

Market forces rained on the parade of Beijing SinoHytec Co., Ltd. (SHSE:688339) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Beijing SinoHytec's six analysts are now forecasting revenues of CN¥971m in 2024. This would be a sizeable 27% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 23% to CN¥1.37 per share. However, before this estimates update, the consensus had been expecting revenues of CN¥1.4b and CN¥0.81 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Beijing SinoHytec

The consensus price target was broadly unchanged at CN¥54.83, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Beijing SinoHytec's rate of growth is expected to accelerate meaningfully, with the forecast 37% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. 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 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Beijing SinoHytec is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Beijing SinoHytec after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Beijing SinoHytec analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.