Analysts Have Just Cut Their Shanghai Haohai Biological Technology Co., Ltd. (HKG:6826) Revenue Estimates By 14%

The analysts covering Shanghai Haohai Biological Technology Co., Ltd. (HKG:6826) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from Shanghai Haohai Biological Technology's dual analysts is for revenues of CN¥1.9b in 2021 which - if met - would reflect a major 22% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 23% to CN¥2.45. Previously, the analysts had been modelling revenues of CN¥2.2b and earnings per share (EPS) of CN¥2.44 in 2021. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a substantial drop in revenues and some minor tweaks to earnings numbers.

View our latest analysis for Shanghai Haohai Biological Technology

the analysts have also increased their price target 17% to CN¥75.18, clearly signalling that lower revenue forecasts this year are not expected to have a material impact on Shanghai Haohai Biological Technology's valuation. 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. Currently, the most bullish analyst values Shanghai Haohai Biological Technology at CN¥100.00 per share, while the most bearish prices it at CN¥57.66. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. The analysts are definitely expecting Shanghai Haohai Biological Technology's growth to accelerate, with the forecast 22% annualised growth to the end of 2021 ranking favourably alongside historical growth of 12% per annum 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 33% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Shanghai Haohai Biological Technology is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Shanghai Haohai Biological Technology's revenues are expected to grow slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given the stark change in sentiment, we'd understand if investors became more cautious on Shanghai Haohai Biological Technology after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Shanghai Haohai Biological Technology going out as far as 2022, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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