Hualan Biological Engineering Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Hualan Biological Engineering Inc. (SZSE:002007) just released its latest yearly report and things are not looking great. It looks like a clear earnings miss, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥4.4b missed by 14%, and statutory earnings per share of CN¥0.59 fell short of forecasts by 19%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following the latest results, Hualan Biological Engineering's ten analysts are now forecasting revenues of CN¥5.85b in 2025. This would be a major 34% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 24% to CN¥0.74. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.10b and earnings per share (EPS) of CN¥0.93 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

See our latest analysis for Hualan Biological Engineering

The analysts made no major changes to their price target of CN¥20.14, suggesting the downgrades are not expected to have a long-term impact on Hualan Biological Engineering's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Hualan Biological Engineering at CN¥27.77 per share, while the most bearish prices it at CN¥15.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 clear from the latest estimates that Hualan Biological Engineering's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 25% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Hualan Biological Engineering is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hualan Biological Engineering. They also downgraded Hualan Biological Engineering's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at CN¥20.14, 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 Hualan Biological Engineering. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hualan Biological Engineering analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Hualan Biological Engineering that we have uncovered.

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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.