Huitongda Network Co., Ltd. (HKG:9878) Analysts Just Cut Their EPS Forecasts Substantially

The latest analyst coverage could presage a bad day for Huitongda Network Co., Ltd. (HKG:9878), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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After the downgrade, the four analysts covering Huitongda Network are now predicting revenues of CN¥66b in 2025. If met, this would reflect a decent 11% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 42% to CN¥0.69. Previously, the analysts had been modelling revenues of CN¥87b and earnings per share (EPS) of CN¥1.09 in 2025. Indeed, we can see that the analysts are a lot more bearish about Huitongda Network's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Huitongda Network

Analysts made no major changes to their price target of CN¥30.13, suggesting the downgrades are not expected to have a long-term impact on Huitongda Network's valuation. 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 Huitongda Network analyst has a price target of CN¥39.22 per share, while the most pessimistic values it at CN¥16.82. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Huitongda Network's growth to accelerate, with the forecast 11% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Huitongda Network to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Huitongda Network.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Huitongda Network going out to 2027, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.