China National Building Material Company Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

As you might know, China National Building Material Company Limited (HKG:3323) recently reported its yearly numbers. Revenues of CN¥181b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.28 an impressive 131% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

After the latest results, the nine analysts covering China National Building Material are now predicting revenues of CN¥197.6b in 2025. If met, this would reflect a decent 9.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 96% to CN¥0.55. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥210.4b and earnings per share (EPS) of CN¥0.45 in 2025. Although the analysts have lowered their revenue forecasts, they've also made a very substantial lift in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

View our latest analysis for China National Building Material

The consensus has made no major changes to the price target of HK$4.68, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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. Currently, the most bullish analyst values China National Building Material at HK$6.16 per share, while the most bearish prices it at HK$3.40. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that China National Building Material's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 9.0% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 6.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.2% per year. So while China National Building Material's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around China National Building Material's earnings potential next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Even so, earnings are more important to the intrinsic value of the business. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on China National Building Material. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for China National Building Material going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for China National Building Material (1 is a bit unpleasant!) 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.