Earnings Miss: Here's What Shougang Fushan Resources Group Limited (HKG:639) Analysts Are Forecasting For This Year

It's shaping up to be a tough period for Shougang Fushan Resources Group Limited (HKG:639), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. It looks like a clear earnings miss, with both revenues and earnings falling well short of analyst predictions. Revenues of HK$5.9b missed by 11%, and statutory earnings per share of HK$0.38 fell short of forecasts by 10%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Shougang Fushan Resources Group after the latest results.

See our latest analysis for Shougang Fushan Resources Group

Following the latest results, Shougang Fushan Resources Group's four analysts are now forecasting revenues of HK$6.19b in 2024. This would be a modest 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 4.8% to HK$0.36 in the same period. Before this earnings report, the analysts had been forecasting revenues of HK$6.15b and earnings per share (EPS) of HK$0.36 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.

There were no changes to revenue or earnings estimates or the price target of HK$3.31, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Shougang Fushan Resources Group, with the most bullish analyst valuing it at HK$3.79 and the most bearish at HK$3.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Shougang Fushan Resources Group is an easy business to forecast or the the analysts are all using similar assumptions.

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. It's pretty clear that there is an expectation that Shougang Fushan Resources Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.0% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Shougang Fushan Resources Group is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at HK$3.31, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Shougang Fushan Resources Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Shougang Fushan Resources Group analysts - going out to 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Shougang Fushan Resources Group (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

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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.