Greentown China Holdings Limited Beat Revenue Forecasts By 18%: Here's What Analysts Are Forecasting Next

As you might know, Greentown China Holdings Limited (HKG:3900) just kicked off its latest annual results with some very strong numbers. It was a positive result, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 18% higher than the analysts had forecast, at CN¥100b, while EPS of CN¥1.30 beat analyst models by 8.6%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Greentown China Holdings

Taking into account the latest results, the consensus forecast from Greentown China Holdings' seven analysts is for revenues of CN¥113.9b in 2022, which would reflect a decent 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to expand 10% to CN¥1.44. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥105.7b and earnings per share (EPS) of CN¥1.41 in 2022. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of HK$13.39, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Greentown China Holdings, with the most bullish analyst valuing it at HK$15.90 and the most bearish at HK$9.77 per share. This shows there is still a bit of 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Greentown China Holdings' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Compare this to the 275 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. So it's pretty clear that, while Greentown China Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Greentown China Holdings following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at HK$13.39, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for Greentown China Holdings going out to 2024, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Greentown China Holdings (1 is concerning) you should be aware of.

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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.