New Forecasts: Here's What Analysts Think The Future Holds For Minsheng Education Group Company Limited (HKG:1569)

Minsheng Education Group Company Limited (HKG:1569) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Minsheng Education Group will make substantially more sales than they'd previously expected. The market seems to be pricing in some improvement in the business too, with the stock up 6.6% over the past week, closing at HK$1.45. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for Minsheng Education Group from its four analysts is for revenues of CN¥2.1b in 2021 which, if met, would be a major 90% increase on its sales over the past 12 months. Per-share earnings are expected to surge 319% to CN¥0.13. Prior to this update, the analysts had been forecasting revenues of CN¥1.5b and earnings per share (EPS) of CN¥0.13 in 2021. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

See our latest analysis for Minsheng Education Group

The consensus price target increased 6.4% to CN¥1.57, with an improved revenue forecast carrying the promise of a more valuable business, in time. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Minsheng Education Group, with the most bullish analyst valuing it at CN¥2.39 and the most bearish at CN¥1.43 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.

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 analysts are definitely expecting Minsheng Education Group's growth to accelerate, with the forecast 90% annualised growth to the end of 2021 ranking favourably alongside historical growth of 23% 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 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Minsheng Education Group is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Minsheng Education Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Minsheng Education Group going out to 2023, and you can see them free on our platform here..

You can also see our analysis of Minsheng Education Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you’re looking to trade Minsheng Education Group, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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