Shanghai Ganglian E-Commerce Holdings Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Shanghai Ganglian E-Commerce Holdings Co., Ltd. (SZSE:300226) shareholders are probably feeling a little disappointed, since its shares fell 6.0% to CN¥20.70 in the week after its latest yearly results. The result was positive overall - although revenues of CN¥86b were in line with what the analysts predicted, Shanghai Ganglian E-Commerce Holdings surprised by delivering a statutory profit of CN¥0.74 per share, modestly greater than expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Shanghai Ganglian E-Commerce Holdings

Taking into account the latest results, the consensus forecast from Shanghai Ganglian E-Commerce Holdings' five analysts is for revenues of CN¥96.7b in 2024. This reflects a meaningful 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 19% to CN¥0.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥95.8b and earnings per share (EPS) of CN¥0.91 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at CN¥35.64, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Shanghai Ganglian E-Commerce Holdings, with the most bullish analyst valuing it at CN¥41.20 and the most bearish at CN¥30.08 per share. 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.

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. One thing stands out from these estimates, which is that Shanghai Ganglian E-Commerce Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2024. If achieved, this would be a much better result than the 8.1% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually. So it looks like Shanghai Ganglian E-Commerce Holdings is expected to grow at about the same rate as the wider 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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CN¥35.64, 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. At Simply Wall St, we have a full range of analyst estimates for Shanghai Ganglian E-Commerce Holdings going out to 2026, and you can see them free on our platform here..

You can also see our analysis of Shanghai Ganglian E-Commerce Holdings' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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.