China Resources Mixc Lifestyle Services Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in China Resources Mixc Lifestyle Services Limited (HKG:1209) had a good week, as its shares rose 3.3% to close at HK$45.25 following the release of its full-year results. Revenues of CN¥6.8b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.48 an impressive 36% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on China Resources Mixc Lifestyle Services after the latest results.

View our latest analysis for China Resources Mixc Lifestyle Services

Taking into account the latest results, the current consensus from China Resources Mixc Lifestyle Services' eight analysts is for revenues of CN¥8.87b in 2021, which would reflect a huge 31% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 30% to CN¥0.63. In the lead-up to this report, the analysts had been modelling revenues of CN¥8.97b and earnings per share (EPS) of CN¥0.63 in 2021. 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 consensus price target rose 7.3% to CN¥43.41despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of China Resources Mixc Lifestyle Services' earnings by assigning a price premium. 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. There are some variant perceptions on China Resources Mixc Lifestyle Services, with the most bullish analyst valuing it at CN¥62.49 and the most bearish at CN¥39.12 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await China Resources Mixc Lifestyle Services shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Resources Mixc Lifestyle Services' past performance and to peers in the same industry. The analysts are definitely expecting China Resources Mixc Lifestyle Services' growth to accelerate, with the forecast 31% annualised growth to the end of 2021 ranking favourably alongside historical growth of 22% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect China Resources Mixc Lifestyle Services to grow faster than 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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on China Resources Mixc Lifestyle Services. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for China Resources Mixc Lifestyle Services going out to 2023, and you can see them free on our platform here..

You can also see our analysis of China Resources Mixc Lifestyle Services' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. 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.
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