Binjiang Service Group Co. Ltd. (HKG:3316) Just Reported And Analysts Have Been Lifting Their Price Targets

The investors in Binjiang Service Group Co. Ltd.'s (HKG:3316) will be rubbing their hands together with glee today, after the share price leapt 25% to HK$26.85 in the week following its full-year results. It was a workmanlike result, with revenues of CN¥2.0b coming in 2.5% ahead of expectations, and statutory earnings per share of CN¥1.49, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

Check out our latest analysis for Binjiang Service Group

After the latest results, the sole analyst covering Binjiang Service Group are now predicting revenues of CN¥2.69b in 2023. If met, this would reflect a sizeable 35% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 33% to CN¥1.98. Before this earnings report, the analyst had been forecasting revenues of CN¥2.66b and earnings per share (EPS) of CN¥2.07 in 2023. The analyst seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Althoughthe analyst has revised their earnings forecasts for next year, they've also lifted the consensus price target 13% to HK$30.94, suggesting the revised estimates are not indicative of a weaker long-term future for the 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 can infer from the latest estimates that forecasts expect a continuation of Binjiang Service Group'shistorical trends, as the 35% annualised revenue growth to the end of 2023 is roughly in line with the 32% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.5% per year. So it's pretty clear that Binjiang Service Group is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Binjiang Service Group. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Binjiang Service Group , and understanding this should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.