These Analysts Think Jinan Shengquan Group Share Holding Co., Ltd.'s (SHSE:605589) Sales Are Under Threat

Market forces rained on the parade of Jinan Shengquan Group Share Holding Co., Ltd. (SHSE:605589) shareholders today, when the analysts downgraded their 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.

After this downgrade, Jinan Shengquan Group Share Holding's four analysts are now forecasting revenues of CN¥11b in 2024. This would be a huge 26% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 29% to CN¥1.22. Previously, the analysts had been modelling revenues of CN¥13b and earnings per share (EPS) of CN¥1.27 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for Jinan Shengquan Group Share Holding

The consensus price target fell 5.4% to CN¥23.22, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. The analysts are definitely expecting Jinan Shengquan Group Share Holding's growth to accelerate, with the forecast 26% annualised growth to the end of 2024 ranking favourably alongside historical growth of 10% per annum 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 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jinan Shengquan Group Share Holding is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Jinan Shengquan Group Share Holding's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Jinan Shengquan Group Share Holding going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Jinan Shengquan Group Share Holding analysts - going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.