Analysts Have Lowered Expectations For Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (HKG:6990) After Its Latest Results

Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (HKG:6990) just released its latest yearly report and things are not looking great. Revenues missed expectations somewhat, coming in at CN¥1.5b, but statutory earnings fell catastrophically short, with a loss of CN¥2.80 some 89% larger than what the analysts had predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Sichuan Kelun-Biotech Biopharmaceutical

Taking into account the latest results, the current consensus, from the twelve analysts covering Sichuan Kelun-Biotech Biopharmaceutical, is for revenues of CN¥1.16b in 2024. This implies a stressful 25% reduction in Sichuan Kelun-Biotech Biopharmaceutical's revenue over the past 12 months. Losses are forecast to balloon 32% to CN¥3.15 per share. Before this latest report, the consensus had been expecting revenues of CN¥1.25b and CN¥2.27 per share in losses. While this year's revenue estimates dropped there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The analysts lifted their price target 25% to HK$175, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value. 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 Sichuan Kelun-Biotech Biopharmaceutical at HK$210 per share, while the most bearish prices it at HK$109. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that revenue is expected to reverse, with a forecast 25% annualised decline to the end of 2024. That is a notable change from historical growth of 92% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 23% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sichuan Kelun-Biotech Biopharmaceutical is expected to lag the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Sichuan Kelun-Biotech Biopharmaceutical. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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. We have forecasts for Sichuan Kelun-Biotech Biopharmaceutical going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Sichuan Kelun-Biotech Biopharmaceutical you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.