Analysts Just Published A Bright New Outlook For China General Plastics Corporation's (TPE:1305)

China General Plastics Corporation (TPE:1305) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The market may be pricing in some blue sky too, with the share price gaining 15% to NT$32.75 in the last 7 days. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the current consensus from China General Plastics' two analysts is for revenues of NT$19b in 2021 which - if met - would reflect a huge 36% increase on its sales over the past 12 months. Statutory earnings per share are presumed to jump 41% to NT$4.15. Before this latest update, the analysts had been forecasting revenues of NT$16b and earnings per share (EPS) of NT$2.50 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for China General Plastics

With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.0% to NT$29.72 per share. 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. There are some variant perceptions on China General Plastics, with the most bullish analyst valuing it at NT$40.00 and the most bearish at NT$22.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that China General Plastics' rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 0.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that China General Plastics is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, China General Plastics could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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