Guangdong Huate Gas Co., Ltd Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

As you might know, Guangdong Huate Gas Co., Ltd (SHSE:688268) last week released its latest annual, and things did not turn out so great for shareholders. It looks like a weak result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥1.5b missed by 13%, and statutory earnings per share of CN¥1.43 fell short of forecasts by 9.8%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Guangdong Huate Gas

Taking into account the latest results, the current consensus from Guangdong Huate Gas' seven analysts is for revenues of CN¥1.95b in 2024. This would reflect a huge 30% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 39% to CN¥1.98. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.86b and earnings per share (EPS) of CN¥2.15 in 2024. So it's pretty clear consensus is mixed on Guangdong Huate Gas after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

The consensus price target fell 12% to CN¥66.06, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Guangdong Huate Gas at CN¥78.23 per share, while the most bearish prices it at CN¥56.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Guangdong Huate Gas' growth to accelerate, with the forecast 30% annualised growth to the end of 2024 ranking favourably alongside historical growth of 18% 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 Guangdong Huate Gas 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 Guangdong Huate Gas. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 Guangdong Huate Gas' 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 estimates - from multiple Guangdong Huate Gas analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Guangdong Huate Gas that you need to take into consideration.

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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.