Huadian Power International Corporation Limited Just Missed Revenue By 5.7%: Here's What Analysts Think Will Happen Next

The first-quarter results for Huadian Power International Corporation Limited (HKG:1071) were released last week, making it a good time to revisit its performance. Revenues came in 5.7% below expectations, at CN¥31b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.35 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Huadian Power International

Following the recent earnings report, the consensus from eight analysts covering Huadian Power International is for revenues of CN¥111.2b in 2024. This implies a measurable 4.2% decline in revenue compared to the last 12 months. Per-share earnings are expected to bounce 46% to CN¥0.61. Before this earnings report, the analysts had been forecasting revenues of CN¥117.3b and earnings per share (EPS) of CN¥0.56 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

There's been no real change to the average price target of HK$4.63, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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. The most optimistic Huadian Power International analyst has a price target of HK$5.20 per share, while the most pessimistic values it at HK$3.98. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that revenue is expected to reverse, with a forecast 5.6% annualised decline to the end of 2024. That is a notable change from historical growth of 5.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Huadian Power International is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Huadian Power International's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. 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 Huadian Power International analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Huadian Power International has 2 warning signs (and 1 which is significant) we think you should know about.

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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.