Earnings Update: Ganso Co., Ltd. (SHSE:603886) Just Reported Its Full-Year Results And Analysts Are Updating Their Forecasts

Last week, you might have seen that Ganso Co., Ltd. (SHSE:603886) released its full-year result to the market. The early response was not positive, with shares down 6.5% to CN¥16.35 in the past week. Ganso reported in line with analyst predictions, delivering revenues of CN¥2.7b and statutory earnings per share of CN¥1.15, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ganso after the latest results.

View our latest analysis for Ganso

Taking into account the latest results, the current consensus from Ganso's dual analysts is for revenues of CN¥2.82b in 2024. This would reflect a credible 6.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 6.0% to CN¥1.22. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.91b and earnings per share (EPS) of CN¥1.27 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the CN¥21.96 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 6.1% growth on an annualised basis. That is in line with its 5.9% annual growth 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 revenues grow 13% per year. So it's pretty clear that Ganso is expected to grow slower than similar companies in the same 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Ganso 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.