CSPC Pharmaceutical Group Limited Just Recorded A 20% Revenue Beat: Here's What Analysts Think

A week ago, CSPC Pharmaceutical Group Limited (HKG:1093) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Revenue of CN¥8.9b beat expectations by 20% and statutory earnings per share (EPS) of CN¥0.14 exceeded forecasts by 15%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for CSPC Pharmaceutical Group

Taking into account the latest results, the consensus forecast from CSPC Pharmaceutical Group's 28 analysts is for revenues of CN¥35.1b in 2024. This reflects a meaningful 8.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 8.9% to CN¥0.56. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥34.8b and earnings per share (EPS) of CN¥0.55 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of HK$9.57, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values CSPC Pharmaceutical Group at HK$13.00 per share, while the most bearish prices it at HK$6.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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. We can infer from the latest estimates that forecasts expect a continuation of CSPC Pharmaceutical Group'shistorical trends, as the 11% annualised revenue growth to the end of 2024 is roughly in line with the 10% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.7% annually. So although CSPC Pharmaceutical Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at HK$9.57, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for CSPC Pharmaceutical Group going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for CSPC Pharmaceutical Group 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.