China State Construction Development Holdings Limited Just Missed EPS By 10%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on China State Construction Development Holdings Limited (HKG:830), given that the company fell short of expectations when it released its full-year results last week. China State Construction Development Holdings missed earnings this time around, with HK$8.7b revenue coming in 7.2% below what the analysts had modelled. Statutory earnings per share (EPS) of HK$0.26 also fell short of expectations by 10%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on China State Construction Development Holdings after the latest results.

Check out our latest analysis for China State Construction Development Holdings

Taking into account the latest results, the consensus forecast from China State Construction Development Holdings' five analysts is for revenues of HK$10.8b in 2024. This reflects a sizeable 24% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 32% to HK$0.34. In the lead-up to this report, the analysts had been modelling revenues of HK$11.2b and earnings per share (EPS) of HK$0.35 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The analysts made no major changes to their price target of HK$3.33, suggesting the downgrades are not expected to have a long-term impact on China State Construction Development Holdings' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic China State Construction Development Holdings analyst has a price target of HK$3.65 per share, while the most pessimistic values it at HK$3.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China State Construction Development Holdings' past performance and to peers in the same industry. The analysts are definitely expecting China State Construction Development Holdings' growth to accelerate, with the forecast 24% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect China State Construction Development Holdings to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China State Construction Development Holdings. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at HK$3.33, with the latest estimates not enough to have an impact on their price targets.

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 China State Construction Development Holdings analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that China State Construction Development Holdings is showing 1 warning sign in our investment analysis , you should know about...

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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.