Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. Beat Analyst Profit Forecasts, And Analysts Have New Estimates

Shareholders of Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (HKG:6990) will be pleased this week, given that the stock price is up 13% to HK$170 following its latest half-yearly results. Revenues of 60% beat expectations by CN¥1.4b and was sufficient to generate a statutory profit of CN¥1.43 - a pleasant surprise given that the analysts were forecasting a loss! 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.

View our latest analysis for Sichuan Kelun-Biotech Biopharmaceutical

After the latest results, the 13 analysts covering Sichuan Kelun-Biotech Biopharmaceutical are now predicting revenues of CN¥1.95b in 2024. If met, this would reflect a credible 3.8% improvement in revenue compared to the last 12 months. Losses are expected to hold steady at around CN¥0.82. Before this earnings announcement, the analysts had been modelling revenues of CN¥1.23b and losses of CN¥2.76 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Despite these upgrades,the analysts have not made any major changes to their price target of HK$206, implying that their latest estimates don't have a long term impact on what they think the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Sichuan Kelun-Biotech Biopharmaceutical analyst has a price target of HK$243 per share, while the most pessimistic values it at HK$127. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sichuan Kelun-Biotech Biopharmaceutical's past performance and to peers in the same industry. We would highlight that Sichuan Kelun-Biotech Biopharmaceutical's revenue growth is expected to slow, with the forecast 7.8% annualised growth rate until the end of 2024 being well below the historical 25% growth over the last year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 24% annually. Factoring in the forecast slowdown in growth, it seems obvious that Sichuan Kelun-Biotech Biopharmaceutical is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 estimates - from multiple Sichuan Kelun-Biotech Biopharmaceutical analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Sichuan Kelun-Biotech Biopharmaceutical (at least 1 which is a bit unpleasant) , and understanding these should be part of your investment process.

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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.