These Analysts Just Made A Massive Downgrade To Their Shenzhen Kangtai Biological Products Co., Ltd. (SZSE:300601) EPS Forecasts

One thing we could say about the analysts on Shenzhen Kangtai Biological Products Co., Ltd. (SZSE:300601) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Shenzhen Kangtai Biological Products' nine analysts is for revenues of CN¥3.3b in 2024, which would reflect a meaningful 10% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 15% to CN¥0.53. Prior to this update, the analysts had been forecasting revenues of CN¥4.3b and earnings per share (EPS) of CN¥1.01 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shenzhen Kangtai Biological Products' prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Shenzhen Kangtai Biological Products

The consensus price target fell 7.2% to CN¥23.79, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. The analysts are definitely expecting Shenzhen Kangtai Biological Products' growth to accelerate, with the forecast 22% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% per annum 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 Shenzhen Kangtai Biological Products is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Shenzhen Kangtai Biological Products. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Shenzhen Kangtai Biological Products analysts - going out to 2026, and you can see them free on our platform here.

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