Bearish: Analysts Just Cut Their China Resources Cement Holdings Limited (HKG:1313) Revenue and EPS estimates

The analysts covering China Resources Cement Holdings Limited (HKG:1313) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the 15 analysts covering China Resources Cement Holdings are now predicting revenues of HK$30b in 2023. If met, this would reflect a modest 5.1% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 159% to HK$0.28. Prior to this update, the analysts had been forecasting revenues of HK$34b and earnings per share (EPS) of HK$0.40 in 2023. Indeed, we can see that the analysts are a lot more bearish about China Resources Cement Holdings' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for China Resources Cement Holdings

The consensus price target fell 14% to HK$3.64, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. One thing stands out from these estimates, which is that China Resources Cement Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 10% annualised growth until the end of 2023. If achieved, this would be a much better result than the 1.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.2% annually. So it looks like China Resources Cement Holdings is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for China Resources Cement Holdings. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple China Resources Cement Holdings analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.