Zhuhai Huafa Properties Co.,Ltd Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Last week saw the newest half-year earnings release from Zhuhai Huafa Properties Co.,Ltd (SHSE:600325), an important milestone in the company's journey to build a stronger business. Revenues were CN¥25b, 20% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥0.79 being in line with what the analysts forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Zhuhai Huafa PropertiesLtd

Taking into account the latest results, the most recent consensus for Zhuhai Huafa PropertiesLtd from seven analysts is for revenues of CN¥72.2b in 2024. If met, it would imply a huge 28% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 84% to CN¥0.65. In the lead-up to this report, the analysts had been modelling revenues of CN¥74.2b and earnings per share (EPS) of CN¥0.68 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The average price target climbed 16% to CN¥8.37despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Zhuhai Huafa PropertiesLtd at CN¥8.98 per share, while the most bearish prices it at CN¥7.83. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. The analysts are definitely expecting Zhuhai Huafa PropertiesLtd's growth to accelerate, with the forecast 64% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Zhuhai Huafa PropertiesLtd is expected to grow much faster than its 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Zhuhai Huafa PropertiesLtd analysts - 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 5 warning signs for Zhuhai Huafa PropertiesLtd (2 are 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.