Earnings Miss: Shandong Weigao Group Medical Polymer Company Limited Missed EPS By 15% And Analysts Are Revising Their Forecasts

As you might know, Shandong Weigao Group Medical Polymer Company Limited (HKG:1066) last week released its latest half-year, and things did not turn out so great for shareholders. Shandong Weigao Group Medical Polymer missed earnings this time around, with CN¥6.6b revenue coming in 4.2% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥0.22 also fell short of expectations by 15%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Shandong Weigao Group Medical Polymer's eight analysts is for revenues of CN¥13.9b in 2025. This reflects a credible 5.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 6.6% to CN¥0.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥14.2b and earnings per share (EPS) of CN¥0.50 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

View our latest analysis for Shandong Weigao Group Medical Polymer

The analysts made no major changes to their price target of HK$7.12, suggesting the downgrades are not expected to have a long-term impact on Shandong Weigao Group Medical Polymer's 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 Shandong Weigao Group Medical Polymer at HK$8.20 per share, while the most bearish prices it at HK$6.37. This is a very narrow spread of estimates, implying either that Shandong Weigao Group Medical Polymer is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Shandong Weigao Group Medical Polymer's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.4% p.a. 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 19% per year. So it's clear that despite the acceleration in growth, Shandong Weigao Group Medical Polymer is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shandong Weigao Group Medical Polymer. On the negative side, they also downgraded their revenue estimates, and 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 Shandong Weigao Group Medical Polymer analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Shandong Weigao Group Medical Polymer that 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.