Earnings Update: China National Building Material Company Limited (HKG:3323) Just Reported Its Half-Yearly Results And Analysts Are Updating Their Forecasts

China National Building Material Company Limited (HKG:3323) just released its latest half-year report and things are not looking great. Revenues missed expectations somewhat, coming in at CN¥83b, but statutory earnings fell catastrophically short, with a loss of CN¥0.24 some 497% larger than what the analysts had predicted. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for China National Building Material

Following the latest results, China National Building Material's eleven analysts are now forecasting revenues of CN¥190.8b in 2024. This would be a reasonable 3.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 32% to CN¥0.13. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥190.8b and earnings per share (EPS) of CN¥0.13 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$3.54. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic China National Building Material analyst has a price target of HK$6.02 per share, while the most pessimistic values it at HK$1.98. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that China National Building Material is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.5% annualised growth until the end of 2024. If achieved, this would be a much better result than the 5.6% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.0% per year. So it looks like China National Building Material is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for China National Building Material (1 is potentially serious!) that we have uncovered.

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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.