Kindstar Global (Beijing) Technology, Inc. (HKG:9960) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Kindstar Global (Beijing) Technology, Inc. (HKG:9960) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were in line with expectations, at CN¥931m, while statutory losses ballooned to CN¥2.93 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kindstar Global (Beijing) Technology after the latest results.

Check out our latest analysis for Kindstar Global (Beijing) Technology

Following the latest results, Kindstar Global (Beijing) Technology's three analysts are now forecasting revenues of CN¥1.02b in 2022. This would be a notable 9.5% improvement in sales compared to the last 12 months. Kindstar Global (Beijing) Technology is also expected to turn profitable, with statutory earnings of CN¥0.10 per share. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.11b and earnings per share (EPS) of CN¥0.13 in 2022. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a substantial drop in earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the HK$6.17 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Kindstar Global (Beijing) Technology analyst has a price target of HK$8.43 per share, while the most pessimistic values it at HK$3.90. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 9.5% growth on an annualised basis. That is in line with its 8.3% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 17% per year. So it's pretty clear that Kindstar Global (Beijing) Technology is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kindstar Global (Beijing) Technology. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at HK$6.17, 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 Kindstar Global (Beijing) Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for Kindstar Global (Beijing) Technology going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Kindstar Global (Beijing) Technology 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.