Analysts Are Updating Their Tsingtao Brewery Company Limited (HKG:168) Estimates After Its Full-Year Results

Last week, you might have seen that Tsingtao Brewery Company Limited (HKG:168) released its yearly result to the market. The early response was not positive, with shares down 3.3% to HK$53.80 in the past week. It was an okay result overall, with revenues coming in at CN¥34b, roughly what the analysts had been expecting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Tsingtao Brewery

Following the latest results, Tsingtao Brewery's 34 analysts are now forecasting revenues of CN¥35.8b in 2024. This would be a credible 5.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 14% to CN¥3.57. In the lead-up to this report, the analysts had been modelling revenues of CN¥36.3b and earnings per share (EPS) of CN¥3.68 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at HK$76.73, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Tsingtao Brewery at HK$114 per share, while the most bearish prices it at HK$45.88. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tsingtao Brewery's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Tsingtao Brewery'shistorical trends, as the 5.6% annualised revenue growth to the end of 2024 is roughly in line with the 5.4% 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 9.4% per year. So although Tsingtao Brewery is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tsingtao Brewery. 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.

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 Tsingtao Brewery analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Tsingtao Brewery (1 shouldn't be ignored!) that we have uncovered.

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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.