Changchun High-Tech Industry (Group) Co., Ltd. Just Missed Revenue By 11%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Changchun High-Tech Industry (Group) Co., Ltd. (SZSE:000661) filed its quarterly result this time last week. The early response was not positive, with shares down 6.1% to CN¥86.15 in the past week. Revenues were CN¥3.5b, 11% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥11.06 being in line with what the analysts forecast. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Changchun High-Tech Industry (Group)

Following last week's earnings report, Changchun High-Tech Industry (Group)'s nine analysts are forecasting 2024 revenues to be CN¥15.2b, approximately in line with the last 12 months. Statutory per share are forecast to be CN¥10.20, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥16.5b and earnings per share (EPS) of CN¥12.62 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 15% to CN¥166, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Changchun High-Tech Industry (Group) analyst has a price target of CN¥190 per share, while the most pessimistic values it at CN¥143. This is a very narrow spread of estimates, implying either that Changchun High-Tech Industry (Group) 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. We would highlight that Changchun High-Tech Industry (Group)'s revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2024 being well below the historical 17% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% 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 Changchun High-Tech Industry (Group).

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. 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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

You can also see our analysis of Changchun High-Tech Industry (Group)'s Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.