Earnings Miss: China Testing & Certification International Group Co.,Ltd. Missed EPS And Analysts Are Revising Their Forecasts

Last week, you might have seen that China Testing & Certification International Group Co.,Ltd. (SHSE:603060) released its first-quarter result to the market. The early response was not positive, with shares down 3.2% to CN¥7.48 in the past week. It was a pretty negative result overall, with revenues of CN¥459m missing analyst predictions by 9.6%. Worse, the business reported a statutory loss of CN¥0.034 per share, a substantial decline on analyst expectations of a profit. 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 Testing & Certification International GroupLtd after the latest results.

View our latest analysis for China Testing & Certification International GroupLtd

Taking into account the latest results, the consensus forecast from China Testing & Certification International GroupLtd's four analysts is for revenues of CN¥2.98b in 2024. This reflects a decent 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 14% to CN¥0.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.24b and earnings per share (EPS) of CN¥0.42 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the CN¥12.21 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values China Testing & Certification International GroupLtd at CN¥13.00 per share, while the most bearish prices it at CN¥11.80. 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. We would highlight that China Testing & Certification International GroupLtd's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2024 being well below the historical 22% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.5% annually. So it's pretty clear that, while China Testing & Certification International GroupLtd's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Testing & Certification International GroupLtd. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at CN¥12.21, 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 Testing & Certification International GroupLtd going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with China Testing & Certification International GroupLtd .

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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.