Shenwan Hongyuan Group Co., Ltd. Just Beat Revenue Estimates By 19%

The full-year results for Shenwan Hongyuan Group Co., Ltd. (SZSE:000166) were released last week, making it a good time to revisit its performance. It was a mildly positive result, with revenues exceeding expectations at CN¥26b, while statutory earnings per share (EPS) of CN¥0.21 were in line with analyst forecasts. 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 Shenwan Hongyuan Group after the latest results.

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Taking into account the latest results, the current consensus from Shenwan Hongyuan Group's three analysts is for revenues of CN¥26.8b in 2025. This would reflect an okay 3.7% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 28% to CN¥0.27. Before this earnings report, the analysts had been forecasting revenues of CN¥23.6b and earnings per share (EPS) of CN¥0.26 in 2025. Sentiment certainly seems to have improved after the latest results, with a substantial gain in revenue and a small increase to earnings per share estimates.

View our latest analysis for Shenwan Hongyuan Group

Despite these upgrades,the analysts have not made any major changes to their price target of CN¥5.79, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Shenwan Hongyuan Group, with the most bullish analyst valuing it at CN¥7.40 and the most bearish at CN¥4.10 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. One thing stands out from these estimates, which is that Shenwan Hongyuan Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.7% annualised growth until the end of 2025. If achieved, this would be a much better result than the 7.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.3% per year. So although Shenwan Hongyuan Group's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shenwan Hongyuan Group's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at CN¥5.79, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Shenwan Hongyuan Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Shenwan Hongyuan Group going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Shenwan Hongyuan Group that we have uncovered.

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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.