Results: Poly Developments and Holdings Group Co., Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

Poly Developments and Holdings Group Co., Ltd. (SHSE:600048) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to CN¥7.91 in the week after its latest second-quarter results. It looks like a credible result overall - although revenues of CN¥90b were what the analysts expected, Poly Developments and Holdings Group surprised by delivering a (statutory) profit of CN¥0.43 per share, an impressive 65% above what was forecast. 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.

View our latest analysis for Poly Developments and Holdings Group

Following the recent earnings report, the consensus from 19 analysts covering Poly Developments and Holdings Group is for revenues of CN¥334.1b in 2024. This implies a discernible 4.3% decline in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 59% to CN¥0.97. Before this earnings report, the analysts had been forecasting revenues of CN¥334.2b and earnings per share (EPS) of CN¥1.01 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The average price target fell 14% to CN¥9.45, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 Poly Developments and Holdings Group, with the most bullish analyst valuing it at CN¥10.80 and the most bearish at CN¥8.07 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 8.4% annualised decline to the end of 2024. That is a notable change from historical growth of 9.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Poly Developments and Holdings Group is expected to lag 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Poly Developments and Holdings Group's revenue is expected to perform worse than the wider industry. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Poly Developments and Holdings Group going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Poly Developments and Holdings Group (1 is significant) you should be aware of.

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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.