China Education Group Holdings Limited Just Missed EPS By 48%: Here's What Analysts Think Will Happen Next

Investors in China Education Group Holdings Limited (HKG:839) had a good week, as its shares rose 4.9% to close at HK$2.80 following the release of its yearly results. It looks like a pretty bad result, all things considered. Although revenues of CN¥7.4b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 48% to hit CN¥0.36 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the consensus forecast from China Education Group Holdings' seven analysts is for revenues of CN¥7.82b in 2026. This reflects a satisfactory 6.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 72% to CN¥0.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥7.83b and earnings per share (EPS) of CN¥0.73 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

See our latest analysis for China Education Group Holdings

The consensus price target held steady at HK$3.64, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values China Education Group Holdings at HK$5.02 per share, while the most bearish prices it at HK$2.23. 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. It's pretty clear that there is an expectation that China Education Group Holdings' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.2% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. Factoring in the forecast slowdown in growth, it seems obvious that China Education Group Holdings is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on China Education Group Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple China Education Group Holdings analysts - going out to 2028, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for China Education Group Holdings that you need to take into consideration.

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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.