Analysts Have Lowered Expectations For Metallurgical Corporation of China Ltd. (HKG:1618) After Its Latest Results

Metallurgical Corporation of China Ltd. (HKG:1618) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were CN¥634b, with Metallurgical Corporation of China reporting some 5.9% below analyst expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Metallurgical Corporation of China

Following the latest results, Metallurgical Corporation of China's eight analysts are now forecasting revenues of CN¥720.9b in 2024. This would be a meaningful 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 9.8% to CN¥0.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥775.8b and earnings per share (EPS) of CN¥0.65 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 10% to HK$2.07, with the weaker earnings outlook clearly leading valuation estimates. 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 Metallurgical Corporation of China analyst has a price target of HK$2.13 per share, while the most pessimistic values it at HK$2.01. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Metallurgical Corporation of China is an easy business to forecast or the the analysts are all using similar assumptions.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 17% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 32% annually. So it's pretty clear that Metallurgical Corporation of China is expected to grow slower than similar companies in the same 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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 Metallurgical Corporation of China's future valuation.

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 estimates - from multiple Metallurgical Corporation of China 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 Metallurgical Corporation of China 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.