Stock Analysis

Analysts Are Updating Their Want Want China Holdings Limited (HKG:151) Estimates After Its Yearly Results

SEHK:151
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It's been a pretty great week for Want Want China Holdings Limited (HKG:151) shareholders, with its shares surging 13% to HK$4.80 in the week since its latest annual results. Want Want China Holdings reported CN¥24b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥0.34 beat expectations, being 3.5% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Want Want China Holdings

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SEHK:151 Earnings and Revenue Growth June 27th 2024

Taking into account the latest results, the consensus forecast from Want Want China Holdings' 18 analysts is for revenues of CN¥24.4b in 2025. This reflects a satisfactory 3.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 7.9% to CN¥0.36. In the lead-up to this report, the analysts had been modelling revenues of CN¥25.0b and earnings per share (EPS) of CN¥0.35 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

There's been no real change to the average price target of HK$5.55, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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 Want Want China Holdings, with the most bullish analyst valuing it at HK$6.77 and the most bearish at HK$3.90 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 3.4% growth on an annualised basis. That is in line with its 3.4% annual 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 6.7% per year. So it's pretty clear that Want Want China Holdings is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Want Want China Holdings' earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at HK$5.55, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Want Want China Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Want Want China Holdings going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Want Want China Holdings 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.