Qingci Games Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that Qingci Games Inc. (HKG:6633) released its annual result to the market. The early response was not positive, with shares down 2.5% to HK$5.85 in the past week. Statutory earnings per share of CN¥0.07 unfortunately missed expectations by 12%, although it was encouraging to see revenues of CN¥630m exceed expectations by 7.0%. This is an important time for investors, as they can track a company's performance in its report, look at what expert is 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 analyst is expecting for next year.

Check out our latest analysis for Qingci Games

Taking into account the latest results, the current consensus from Qingci Games' lone analyst is for revenues of CN¥2.21b in 2023, which would reflect a major 250% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 711% to CN¥0.59. Before this earnings report, the analyst had been forecasting revenues of CN¥2.24b and earnings per share (EPS) of CN¥0.65 in 2023. The analyst seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

Althoughthe analyst has revised their earnings forecasts for next year, they've also lifted the consensus price target 34% to HK$7.00, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

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 Qingci Games is forecast to grow faster in the future than it has in the past, with revenues expected to display 250% annualised growth until the end of 2023. If achieved, this would be a much better result than the 3.6% annual decline over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 18% per year. So it looks like Qingci Games 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 the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Qingci Games. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Qingci Games going out as far as 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Qingci Games (of which 1 is a bit unpleasant!) you should know about.

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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.