Analysts Are Updating Their China United Network Communications Limited (SHSE:600050) Estimates After Its Interim Results

It's been a good week for China United Network Communications Limited (SHSE:600050) shareholders, because the company has just released its latest half-year results, and the shares gained 7.4% to CN¥4.79. It was a credible result overall, with revenues of CN¥197b and statutory earnings per share of CN¥0.19 both in line with analyst estimates, showing that China United Network Communications is executing in line with expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for China United Network Communications

Following last week's earnings report, China United Network Communications' 13 analysts are forecasting 2024 revenues to be CN¥385.0b, approximately in line with the last 12 months. Per-share earnings are expected to rise 6.0% to CN¥0.29. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥393.7b and earnings per share (EPS) of CN¥0.29 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at CN¥4.47even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. There are some variant perceptions on China United Network Communications, with the most bullish analyst valuing it at CN¥5.70 and the most bearish at CN¥3.80 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China United Network Communications' past performance and to peers in the same industry. We would highlight that China United Network Communications' revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 6.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that China United Network Communications is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings 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.

With that in mind, we wouldn't be too quick to come to a conclusion on China United Network Communications. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple China United Network Communications analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for China United Network Communications that you need to be mindful 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.