Earnings Miss: Horizon Construction Development Limited Missed EPS By 18% And Analysts Are Revising Their Forecasts

Horizon Construction Development Limited (HKG:9930) 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. It was not a great result overall. Although revenues beat expectations, hitting CN¥12b, statutory earnings missed analyst forecasts by 18%, coming in at just CN¥0.28 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Horizon Construction Development

After the latest results, the eight analysts covering Horizon Construction Development are now predicting revenues of CN¥12.4b in 2025. If met, this would reflect a modest 7.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 5.6% to CN¥0.30. In the lead-up to this report, the analysts had been modelling revenues of CN¥12.8b and earnings per share (EPS) of CN¥0.40 in 2025. 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 8.5% to HK$2.45, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Horizon Construction Development, with the most bullish analyst valuing it at HK$3.54 and the most bearish at HK$2.00 per share. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Horizon Construction Development's revenue growth is expected to slow, with the forecast 7.4% annualised growth rate until the end of 2025 being well below the historical 19% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.3% annually. So it's pretty clear that, while Horizon Construction Development's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Horizon Construction Development analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Horizon Construction Development (1 doesn't sit too well with us) 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.