ChenGuang Biotech Group Co., Ltd. (SZSE:300138) Just Reported, And Analysts Assigned A CN¥17.66 Price Target

It's shaping up to be a tough period for ChenGuang Biotech Group Co., Ltd. (SZSE:300138), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 2.9% short of analyst estimates at CN¥6.9b, and statutory earnings of CN¥0.90 per share missed forecasts by 4.3%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 ChenGuang Biotech Group

Taking into account the latest results, the current consensus from ChenGuang Biotech Group's six analysts is for revenues of CN¥7.24b in 2024. This would reflect a credible 5.3% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to descend 18% to CN¥0.74 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥7.00b and earnings per share (EPS) of CN¥0.87 in 2024. While next year's revenue estimates increased, there was also a real cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The analysts also cut ChenGuang Biotech Group's price target 5.5% to CN¥17.66, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue. 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. The most optimistic ChenGuang Biotech Group analyst has a price target of CN¥26.00 per share, while the most pessimistic values it at CN¥11.73. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ChenGuang Biotech Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that ChenGuang Biotech Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it seems obvious that ChenGuang Biotech Group is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ChenGuang Biotech Group. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ChenGuang Biotech Group's future valuation.

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 ChenGuang Biotech Group going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for ChenGuang Biotech Group (of which 2 can't be ignored!) you should know about.

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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.