Earnings Update: Jiangsu Nhwa Pharmaceutical Co., LTD (SZSE:002262) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

Last week, you might have seen that Jiangsu Nhwa Pharmaceutical Co., LTD (SZSE:002262) released its full-year result to the market. The early response was not positive, with shares down 2.5% to CN¥21.54 in the past week. Revenues of CN¥5.0b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥1.03, missing estimates by 4.9%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Jiangsu Nhwa Pharmaceutical after the latest results.

See our latest analysis for Jiangsu Nhwa Pharmaceutical

Taking into account the latest results, the current consensus from Jiangsu Nhwa Pharmaceutical's seven analysts is for revenues of CN¥5.95b in 2024. This would reflect a notable 18% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 20% to CN¥1.23. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.08b and earnings per share (EPS) of CN¥1.30 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The analysts made no major changes to their price target of CN¥29.99, suggesting the downgrades are not expected to have a long-term impact on Jiangsu Nhwa Pharmaceutical's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Jiangsu Nhwa Pharmaceutical, with the most bullish analyst valuing it at CN¥31.00 and the most bearish at CN¥28.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. It's clear from the latest estimates that Jiangsu Nhwa Pharmaceutical's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.5% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jiangsu Nhwa Pharmaceutical is expected to grow at about the same rate as 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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at CN¥29.99, 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 forecasts for Jiangsu Nhwa Pharmaceutical going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Jiangsu Nhwa Pharmaceutical Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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.