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

As you might know, Tsingtao Brewery Company Limited (HKG:168) recently reported its first-quarter numbers. It was an okay report, and revenues came in at CN¥10b, approximately in line with analyst estimates leading up to the results announcement. 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.

View our latest analysis for Tsingtao Brewery

After the latest results, the 36 analysts covering Tsingtao Brewery are now predicting revenues of CN¥35.5b in 2024. If met, this would reflect a reasonable 6.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 11% to CN¥3.57. In the lead-up to this report, the analysts had been modelling revenues of CN¥35.5b and earnings per share (EPS) of CN¥3.57 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of HK$74.59, showing that the business is executing well and in line with expectations. 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. The most optimistic Tsingtao Brewery analyst has a price target of HK$101 per share, while the most pessimistic values it at HK$45.79. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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. It's clear from the latest estimates that Tsingtao Brewery's rate of growth is expected to accelerate meaningfully, with the forecast 8.6% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.3% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.5% per year. Tsingtao Brewery is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Tsingtao Brewery going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Tsingtao Brewery (1 doesn't sit too well with us!) that you need to be mindful 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.