Beijing Enterprises Holdings Limited Just Missed EPS By 31%: Here's What Analysts Think Will Happen Next

Beijing Enterprises Holdings Limited (HKG:392) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of HK$82b missed by 12%, and statutory earnings per share of HK$4.36 fell short of forecasts by 31%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Beijing Enterprises Holdings

After the latest results, the five analysts covering Beijing Enterprises Holdings are now predicting revenues of HK$93.3b in 2024. If met, this would reflect a notable 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 54% to HK$6.71. In the lead-up to this report, the analysts had been modelling revenues of HK$98.0b and earnings per share (EPS) of HK$6.86 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the HK$35.35 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Beijing Enterprises Holdings, with the most bullish analyst valuing it at HK$40.00 and the most bearish at HK$32.80 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Beijing Enterprises Holdings is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Beijing Enterprises Holdings' growth to accelerate, with the forecast 13% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.7% per annum 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 5.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Beijing Enterprises Holdings to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Beijing Enterprises Holdings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Beijing Enterprises Holdings going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Beijing Enterprises Holdings (1 is a bit concerning!) that you should be aware of.

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.