These Analysts Just Made A Substantial Downgrade To Their Shanghai Haohai Biological Technology Co., Ltd. (HKG:6826) EPS Forecasts

Today is shaping up negative for Shanghai Haohai Biological Technology Co., Ltd. (HKG:6826) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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Following the downgrade, the most recent consensus for Shanghai Haohai Biological Technology from its dual analysts is for revenues of CN¥2.6b in 2025 which, if met, would be an okay 5.3% increase on its sales over the past 12 months. Statutory earnings per share are presumed to swell 18% to CN¥1.99. Before this latest update, the analysts had been forecasting revenues of CN¥3.2b and earnings per share (EPS) of CN¥2.43 in 2025. Indeed, we can see that the analysts are a lot more bearish about Shanghai Haohai Biological Technology's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Shanghai Haohai Biological Technology

The consensus price target fell 14% to CN¥33.71, with the weaker earnings outlook clearly leading analyst valuation estimates.

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 Shanghai Haohai Biological Technology's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 26% per year. Factoring in the forecast slowdown in growth, it seems obvious that Shanghai Haohai Biological Technology is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Uncomfortably, our automated valuation tool also suggests that Shanghai Haohai Biological Technology stock could be overvalued following the downgrade. Shareholders could be left disappointed if these estimates play out. Find out why, and see how we estimate the valuation for free on our platform here.

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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.