Earnings Report: Citic Pacific Special Steel Group Co., Ltd Missed Revenue Estimates By 91%

Last week, you might have seen that Citic Pacific Special Steel Group Co., Ltd (SZSE:000708) released its quarterly result to the market. The early response was not positive, with shares down 3.9% to CN¥11.33 in the past week. Citic Pacific Special Steel Group reported a serious miss, with revenue of CN¥29b falling a huge 91% short of analyst estimates. The bright side is that statutory earnings per share of CN¥1.11 were in line with 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Citic Pacific Special Steel Group

Taking into account the latest results, Citic Pacific Special Steel Group's six analysts currently expect revenues in 2024 to be CN¥114.8b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 4.2% to CN¥1.12. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥117.4b and earnings per share (EPS) of CN¥1.25 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 7.1% to CN¥17.70. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Citic Pacific Special Steel Group at CN¥19.46 per share, while the most bearish prices it at CN¥15.93. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. 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 3.8% growth on an annualised basis. This is compared to a historical growth rate of 10% 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 9.6% 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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 Citic Pacific Special Steel Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Citic Pacific Special Steel Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Citic Pacific Special Steel Group 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 Citic Pacific Special Steel Group .

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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.