Hengan International Group Company Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Shareholders might have noticed that Hengan International Group Company Limited (HKG:1044) filed its full-year result this time last week. The early response was not positive, with shares down 2.6% to HK$22.45 in the past week. It was not a great result overall. While revenues of CN¥23b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit CN¥2.02 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the eleven analysts covering Hengan International Group are now predicting revenues of CN¥23.1b in 2025. If met, this would reflect an okay 2.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 15% to CN¥2.27. Before this earnings report, the analysts had been forecasting revenues of CN¥23.6b and earnings per share (EPS) of CN¥2.40 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Check out our latest analysis for Hengan International Group

The consensus price target fell 6.6% to HK$25.68, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Hengan International Group analyst has a price target of HK$30.05 per share, while the most pessimistic values it at HK$19.95. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The analysts are definitely expecting Hengan International Group's growth to accelerate, with the forecast 2.1% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.3% per annum 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, Hengan International Group is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Hengan International Group going out to 2027, 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 1 warning sign for Hengan International Group 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.