Zhuhai Huafa Properties Co.,Ltd Just Missed EPS By 35%: Here's What Analysts Think Will Happen Next

It's been a good week for Zhuhai Huafa Properties Co.,Ltd (SHSE:600325) shareholders, because the company has just released its latest full-year results, and the shares gained 4.7% to CN¥6.27. Revenue of CN¥72b surpassed estimates by 5.5%, although statutory earnings per share missed badly, coming in 35% below expectations at CN¥0.79 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Zhuhai Huafa PropertiesLtd

After the latest results, the seven analysts covering Zhuhai Huafa PropertiesLtd are now predicting revenues of CN¥75.6b in 2024. If met, this would reflect a reasonable 4.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 102% to CN¥1.35. In the lead-up to this report, the analysts had been modelling revenues of CN¥75.0b and earnings per share (EPS) of CN¥1.31 in 2024. So the consensus seems to have become somewhat more optimistic on Zhuhai Huafa PropertiesLtd's earnings potential following these results.

The average the analysts price target fell 6.0% to CN¥11.52, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Zhuhai Huafa PropertiesLtd analyst has a price target of CN¥15.36 per share, while the most pessimistic values it at CN¥9.20. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Zhuhai Huafa PropertiesLtd's revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last five years. Compare this to the 123 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it looks like Zhuhai Huafa PropertiesLtd is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zhuhai Huafa PropertiesLtd's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zhuhai Huafa PropertiesLtd's future valuation.

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 Zhuhai Huafa PropertiesLtd analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 4 warning signs we've spotted with Zhuhai Huafa PropertiesLtd .

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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.