CSPC Pharmaceutical Group Limited Just Missed Earnings - But Analysts Have Updated Their Models

CSPC Pharmaceutical Group Limited (HKG:1093) just released its latest interim report and things are not looking great. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥13b missed by 11%, and statutory earnings per share of CN¥0.093 fell short of forecasts by 30%. 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.

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Following the latest results, CSPC Pharmaceutical Group's 28 analysts are now forecasting revenues of CN¥29.8b in 2025. This would be a decent 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 39% to CN¥0.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥30.5b and earnings per share (EPS) of CN¥0.49 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

See our latest analysis for CSPC Pharmaceutical Group

What's most unexpected is that the consensus price target rose 9.7% to HK$10.55, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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 CSPC Pharmaceutical Group analyst has a price target of HK$18.63 per share, while the most pessimistic values it at HK$5.00. 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.

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 clear from the latest estimates that CSPC Pharmaceutical Group's rate of growth is expected to accelerate meaningfully, with the forecast 31% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CSPC Pharmaceutical Group to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CSPC Pharmaceutical Group. They also downgraded CSPC Pharmaceutical Group's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for CSPC Pharmaceutical Group going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for CSPC Pharmaceutical Group you should be aware of.

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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.