Guangzhou Guanggang Gases & Energy Co.,Ltd. Just Missed EPS By 23%: Here's What Analysts Think Will Happen Next

Guangzhou Guanggang Gases & Energy Co.,Ltd. (SHSE:688548) just released its latest quarterly report and things are not looking great. Unfortunately, Guangzhou Guanggang Gases & EnergyLtd delivered a serious earnings miss. Revenues of CN¥512m were 14% below expectations, and statutory earnings per share of CN¥0.05 missed estimates by 23%. 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.

Check out our latest analysis for Guangzhou Guanggang Gases & EnergyLtd

After the latest results, the five analysts covering Guangzhou Guanggang Gases & EnergyLtd are now predicting revenues of CN¥2.14b in 2024. If met, this would reflect a meaningful 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 5.8% to CN¥0.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.21b and earnings per share (EPS) of CN¥0.27 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.4% to CN¥11.10. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Guangzhou Guanggang Gases & EnergyLtd, with the most bullish analyst valuing it at CN¥12.20 and the most bearish at CN¥10.00 per share. This is a very narrow spread of estimates, implying either that Guangzhou Guanggang Gases & EnergyLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Guangzhou Guanggang Gases & EnergyLtd's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.2% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Guangzhou Guanggang Gases & EnergyLtd 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 Guangzhou Guanggang Gases & EnergyLtd. They also downgraded Guangzhou Guanggang Gases & EnergyLtd's revenue estimates, but industry data suggests that it 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 Guangzhou Guanggang Gases & EnergyLtd's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Guangzhou Guanggang Gases & EnergyLtd. Long-term earnings power is much more important than next year's profits. We have forecasts for Guangzhou Guanggang Gases & EnergyLtd going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Guangzhou Guanggang Gases & EnergyLtd (including 1 which is a bit concerning) .

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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.

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