Hengdian Entertainment Co.,LTD Recorded A 10.0% Miss On Revenue: Analysts Are Revisiting Their Models

It's been a good week for Hengdian Entertainment Co.,LTD (SHSE:603103) shareholders, because the company has just released its latest third-quarter results, and the shares gained 6.8% to CN¥12.28. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥450m, statutory earnings were in line with expectations, at CN¥0.26 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Hengdian EntertainmentLTD

Taking into account the latest results, the consensus forecast from Hengdian EntertainmentLTD's two analysts is for revenues of CN¥2.91b in 2025. This reflects a substantial 45% improvement in revenue compared to the last 12 months. Hengdian EntertainmentLTD is also expected to turn profitable, with statutory earnings of CN¥0.55 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.10b and earnings per share (EPS) of CN¥0.67 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The consensus price target fell 9.4% to CN¥16.43, with the weaker earnings outlook clearly leading valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Hengdian EntertainmentLTD is forecast to grow faster in the future than it has in the past, with revenues expected to display 34% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.2% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 14% per year. Not only are Hengdian EntertainmentLTD's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 Hengdian EntertainmentLTD's future valuation.

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

However, before you get too enthused, we've discovered 1 warning sign for Hengdian EntertainmentLTD that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.