China Film Co., Ltd. Beat Revenue Forecasts By 6.9%: Here's What Analysts Are Forecasting Next

China Film Co., Ltd. (SHSE:600977) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results overall were respectable, with statutory earnings of CN¥0.14 per share roughly in line with what the analysts had forecast. Revenues of CN¥2.1b came in 6.9% ahead of analyst predictions. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on China Film after the latest results.

Check out our latest analysis for China Film

Following last week's earnings report, China Film's five analysts are forecasting 2024 revenues to be CN¥4.63b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 834% to CN¥0.54. Before this earnings report, the analysts had been forecasting revenues of CN¥6.32b and earnings per share (EPS) of CN¥0.54 in 2024. Indeed we can see that the consensus opinion has undergone some fundamental changes following the latest results, with a pretty serious reduction to revenues and some minor tweaks to earnings numbers.

The average price target was steady at CN¥11.08even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values China Film at CN¥12.40 per share, while the most bearish prices it at CN¥10.50. This is a very narrow spread of estimates, implying either that China Film 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. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 13% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 14% per year. So it's pretty clear that, although revenues are improving, China Film is still expected to grow slower than the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CN¥11.08, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on China Film. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple China Film analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with China Film , and understanding it should be part of your investment process.

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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.