Results: China Aviation Oil (Singapore) Corporation Ltd Beat Earnings Expectations And Analysts Now Have New Forecasts

Shareholders might have noticed that China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) filed its annual result this time last week. The early response was not positive, with shares down 3.2% to S$0.91 in the past week. It looks like a credible result overall - although revenues of US$14b were what the analyst expected, China Aviation Oil (Singapore) surprised by delivering a (statutory) profit of US$0.068 per share, an impressive 26% above what was forecast. Following the result, the analyst has 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. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

View our latest analysis for China Aviation Oil (Singapore)

Taking into account the latest results, the consensus forecast from China Aviation Oil (Singapore)'s one analyst is for revenues of US$15.2b in 2024. This reflects a modest 5.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 21% to US$0.083. In the lead-up to this report, the analyst had been modelling revenues of US$20.1b and earnings per share (EPS) of US$0.09 in 2024. It looks like sentiment has fallen somewhat in the aftermath of these results, with a pretty serious reduction to revenue estimates and a small dip in earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the S$1.08 price target, showing that the analyst doesn't think the changes have a meaningful impact on its intrinsic value.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that China Aviation Oil (Singapore)'s rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.4% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 6.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 1.8% per year. So although China Aviation Oil (Singapore) is expected to return to growth, it's also expected to grow revenues during a time when the wider industry is estimated to see revenue decline.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates that is expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at S$1.08, with the latest estimates not enough to have an impact on their price target.

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 analyst estimates for China Aviation Oil (Singapore) going out as far as 2026, and you can see them free on our platform here.

We also provide an overview of the China Aviation Oil (Singapore) Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.