Earnings Report: Shenzhen Kangtai Biological Products Co., Ltd. Missed Revenue Estimates By 49%

As you might know, Shenzhen Kangtai Biological Products Co., Ltd. (SZSE:300601) recently reported its quarterly numbers. Revenues were CN¥452m, 49% shy of what the analysts were expecting, although statutory earnings of CN¥0.77 per share were roughly in line with what was forecast. 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. 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 Shenzhen Kangtai Biological Products

After the latest results, the nine analysts covering Shenzhen Kangtai Biological Products are now predicting revenues of CN¥4.54b in 2024. If met, this would reflect a substantial 43% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 92% to CN¥1.22. Before this earnings report, the analysts had been forecasting revenues of CN¥4.81b and earnings per share (EPS) of CN¥1.36 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The analysts made no major changes to their price target of CN¥36.75, suggesting the downgrades are not expected to have a long-term impact on Shenzhen Kangtai Biological Products' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Shenzhen Kangtai Biological Products analyst has a price target of CN¥46.00 per share, while the most pessimistic values it at CN¥29.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's clear from the latest estimates that Shenzhen Kangtai Biological Products' rate of growth is expected to accelerate meaningfully, with the forecast 61% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 24% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shenzhen Kangtai Biological Products 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. They also downgraded Shenzhen Kangtai Biological Products' 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¥36.75, 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 Shenzhen Kangtai Biological Products 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 2 warning signs for Shenzhen Kangtai Biological Products 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.