One thing we could say about the analysts on China Risun Group Limited (HKG:1907) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. At HK$2.64, shares are up 6.0% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Following the latest downgrade, China Risun Group's two analysts currently expect revenues in 2025 to be CN¥48b, approximately in line with the last 12 months. Statutory earnings per share are presumed to jump 2,365% to CN¥0.11. Previously, the analysts had been modelling revenues of CN¥56b and earnings per share (EPS) of CN¥0.13 in 2025. Indeed, we can see that the analysts are a lot more bearish about China Risun Group's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
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These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Risun Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that China Risun Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.6% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that China Risun Group is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that China Risun Group's revenues are expected to grow slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on China Risun Group, and their negativity could be grounds for caution.
There might be good reason for analyst bearishness towards China Risun Group, like its declining profit margins. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.
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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.