Earnings Miss: Beijing Zhong Ke San Huan High-Tech Co., Ltd. Missed EPS By 26% And Analysts Are Revising Their Forecasts

Last week, you might have seen that Beijing Zhong Ke San Huan High-Tech Co., Ltd. (SZSE:000970) released its full-year result to the market. The early response was not positive, with shares down 2.7% to CN¥9.38 in the past week. Statutory earnings per share fell badly short of expectations, coming in at CN¥0.23, some 26% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CN¥8.4b. This is an important time for investors, as they can track a company's performance in its report, look at what expert is 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 analyst is expecting for next year.

See our latest analysis for Beijing Zhong Ke San Huan High-Tech

Taking into account the latest results, the current consensus from Beijing Zhong Ke San Huan High-Tech's solitary analyst is for revenues of CN¥9.48b in 2024. This would reflect a decent 13% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 37% to CN¥0.31. Yet prior to the latest earnings, the analyst had been anticipated revenues of CN¥11.3b and earnings per share (EPS) of CN¥0.52 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the CN¥12.61 price target, showing that the analyst doesn't think the changes have a meaningful impact on its intrinsic value.

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. It's pretty clear that there is an expectation that Beijing Zhong Ke San Huan High-Tech's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Beijing Zhong Ke San Huan High-Tech.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Beijing Zhong Ke San Huan High-Tech. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 analyst estimates for Beijing Zhong Ke San Huan High-Tech going out as far as 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Beijing Zhong Ke San Huan High-Tech 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.