Earnings Miss: China Film Co., Ltd. Missed EPS By 50% And Analysts Are Revising Their Forecasts

It's shaping up to be a tough period for China Film Co., Ltd. (SHSE:600977), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥5.3b, statutory earnings missed forecasts by an incredible 50%, coming in at just CN¥0.14 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for China Film

After the latest results, the six analysts covering China Film are now predicting revenues of CN¥5.85b in 2024. If met, this would reflect a solid 9.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 177% to CN¥0.39. Before this earnings report, the analysts had been forecasting revenues of CN¥6.92b and earnings per share (EPS) of CN¥0.51 in 2024. Indeed, we can see that the analysts are a lot more bearish about China Film's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥12.03, suggesting the downgrades are not expected to have a long-term impact on China Film's valuation. 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. There are some variant perceptions on China Film, with the most bullish analyst valuing it at CN¥12.90 and the most bearish at CN¥10.60 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting China Film is an easy business to forecast or the the analysts are all using similar assumptions.

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. For example, we noticed that China Film's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 9.7% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 18% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 15% annually for the foreseeable future. So although China Film's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 held steady at CN¥12.03, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple China Film analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for China Film you should know about.

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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.