China Sunsine Chemical Holdings Ltd. Just Beat EPS By 8.3%: Here's What Analysts Think Will Happen Next

China Sunsine Chemical Holdings Ltd. (SGX:QES) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. China Sunsine Chemical Holdings missed revenue estimates by 3.5%, with sales of CN¥2.3b, although statutory earnings per share (EPS) of CN¥0.23 beat expectations, coming in 8.3% ahead of analyst estimates. 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. 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 China Sunsine Chemical Holdings

Taking into account the latest results, the most recent consensus for China Sunsine Chemical Holdings from three analysts is for revenues of CN¥3.24b in 2021 which, if met, would be a substantial 39% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 45% to CN¥0.31. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.01b and earnings per share (EPS) of CN¥0.28 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of S$0.55, suggesting that the forecast performance does not have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on China Sunsine Chemical Holdings, with the most bullish analyst valuing it at S$0.61 and the most bearish at S$0.47 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. The analysts are definitely expecting China Sunsine Chemical Holdings' growth to accelerate, with the forecast 39% growth ranking favourably alongside historical growth of 6.1% 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 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect China Sunsine Chemical Holdings to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards China Sunsine Chemical Holdings following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at CN¥0.55, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on China Sunsine Chemical Holdings. 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 China Sunsine Chemical Holdings going out to 2023, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for China Sunsine Chemical Holdings you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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