What Does The Future Hold For Chongqing Zaisheng Technology Co., Ltd. (SHSE:603601)? These Analysts Have Been Cutting Their Estimates

The analysts covering Chongqing Zaisheng Technology Co., Ltd. (SHSE:603601) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Shares are up 6.3% to CN¥3.21 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the current consensus from Chongqing Zaisheng Technology's three analysts is for revenues of CN¥1.7b in 2024 which - if met - would reflect a modest 2.9% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 531% to CN¥0.23. Previously, the analysts had been modelling revenues of CN¥2.3b and earnings per share (EPS) of CN¥0.24 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a pretty serious reduction to revenue estimates and a minor downgrade to earnings per share numbers as well.

See our latest analysis for Chongqing Zaisheng Technology

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 Chongqing Zaisheng Technology's revenue growth is expected to slow, with the forecast 2.9% annualised growth rate until the end of 2024 being well below the historical 5.7% 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 16% per year. Factoring in the forecast slowdown in growth, it seems obvious that Chongqing Zaisheng Technology is also expected to grow slower than other industry participants.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Chongqing Zaisheng Technology. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Chongqing Zaisheng Technology's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Chongqing Zaisheng Technology going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Chongqing Zaisheng Technology going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.