China Merchants Energy Shipping Co., Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

China Merchants Energy Shipping Co., Ltd. (SHSE:601872) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥26b, statutory earnings beat expectations 3.7%, with China Merchants Energy Shipping reporting profits of CN¥0.63 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

The end of cancer? These 15 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.

Following the latest results, China Merchants Energy Shipping's six analysts are now forecasting revenues of CN¥28.0b in 2025. This would be a decent 8.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 17% to CN¥0.73. Before this earnings report, the analysts had been forecasting revenues of CN¥30.2b and earnings per share (EPS) of CN¥0.81 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

Check out our latest analysis for China Merchants Energy Shipping

The analysts made no major changes to their price target of CN¥9.70, suggesting the downgrades are not expected to have a long-term impact on China Merchants Energy Shipping's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values China Merchants Energy Shipping at CN¥10.40 per share, while the most bearish prices it at CN¥8.70. This is a very narrow spread of estimates, implying either that China Merchants Energy Shipping is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that China Merchants Energy Shipping's rate of growth is expected to accelerate meaningfully, with the forecast 8.4% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.9% 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 5.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that China Merchants Energy Shipping is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Merchants Energy Shipping. 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¥9.70, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for China Merchants Energy Shipping going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for China Merchants Energy Shipping you should be aware of.

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.