HK$10.54: That's What Analysts Think Kingdee International Software Group Company Limited (HKG:268) Is Worth After Its Latest Results

It's been a good week for Kingdee International Software Group Company Limited (HKG:268) shareholders, because the company has just released its latest interim results, and the shares gained 2.1% to HK$5.91. Revenues of CN¥2.9b arrived in line with expectations, although statutory losses per share were CN¥0.061, an impressive 39% smaller than what broker models predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kingdee International Software Group after the latest results.

View our latest analysis for Kingdee International Software Group

Taking into account the latest results, the most recent consensus for Kingdee International Software Group from 24 analysts is for revenues of CN¥6.48b in 2024. If met, it would imply a notable 8.2% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 55% to CN¥0.018. Before this latest report, the consensus had been expecting revenues of CN¥6.59b and CN¥0.018 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although revenue forecasts held steady, the consensus also made a modest increase to its losses per share forecasts.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 12% to HK$10.54, with the analysts signalling that growing losses would be a definite concern. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Kingdee International Software Group, with the most bullish analyst valuing it at HK$17.40 and the most bearish at HK$6.73 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. It's clear that while Kingdee International Software Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Kingdee International Software Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Kingdee International Software Group. 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 Kingdee International Software Group 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 1 warning sign with Kingdee International Software Group , and understanding it should be part of your investment process.

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.