Citic Pacific Special Steel Group Co., Ltd Just Missed Earnings - But Analysts Have Updated Their Models

Citic Pacific Special Steel Group Co., Ltd (SZSE:000708) shareholders are probably feeling a little disappointed, since its shares fell 3.9% to CN¥15.23 in the week after its latest annual results. Results overall were not great, with earnings of CN¥1.11 per share falling drastically short of analyst expectations. Meanwhile revenues hit CN¥114b and were slightly better than forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Citic Pacific Special Steel Group

After the latest results, the seven analysts covering Citic Pacific Special Steel Group are now predicting revenues of CN¥117.9b in 2024. If met, this would reflect a satisfactory 3.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 10% to CN¥1.25. In the lead-up to this report, the analysts had been modelling revenues of CN¥117.6b and earnings per share (EPS) of CN¥1.96 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥19.05, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Citic Pacific Special Steel Group, with the most bullish analyst valuing it at CN¥19.46 and the most bearish at CN¥18.63 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Citic Pacific Special Steel Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 9.4% 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 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Citic Pacific Special Steel Group.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Citic Pacific Special Steel Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Citic Pacific Special Steel Group's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Citic Pacific Special Steel Group analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Citic Pacific Special Steel Group 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.