Chinasoft International Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Chinasoft International Limited (HKG:354), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥17b, statutory earnings missed forecasts by an incredible 25%, coming in at just CN¥0.19 per share. 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 Chinasoft International after the latest results.

Taking into account the latest results, the current consensus from Chinasoft International's ten analysts is for revenues of CN¥19.6b in 2025. This would reflect a solid 16% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 49% to CN¥0.31. Before this earnings report, the analysts had been forecasting revenues of CN¥19.6b and earnings per share (EPS) of CN¥0.31 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

Check out our latest analysis for Chinasoft International

The analysts reconfirmed their price target of HK$5.23, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Chinasoft International analyst has a price target of HK$7.00 per share, while the most pessimistic values it at HK$4.12. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Chinasoft International's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Chinasoft International 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at HK$5.23, 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. We have estimates - from multiple Chinasoft International analysts - going out to 2027, and you can see them free on our platform here.

You can also see whether Chinasoft International is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.