Investors in Zhuhai Huafa Properties Co.,Ltd (SHSE:600325) had a good week, as its shares rose 4.7% to close at CN¥6.27 following the release of its annual results. Revenue of CN¥72b surpassed estimates by 5.5%, although statutory earnings per share missed badly, coming in 35% below expectations at CN¥0.79 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Zhuhai Huafa PropertiesLtd from seven analysts is for revenues of CN¥75.6b in 2024. If met, it would imply a satisfactory 4.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 102% to CN¥1.35. Before this earnings report, the analysts had been forecasting revenues of CN¥75.0b and earnings per share (EPS) of CN¥1.31 in 2024. So the consensus seems to have become somewhat more optimistic on Zhuhai Huafa PropertiesLtd's earnings potential following these results.
The consensus price target fell 6.0% to CN¥11.52, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Zhuhai Huafa PropertiesLtd at CN¥15.36 per share, while the most bearish prices it at CN¥9.20. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Zhuhai Huafa PropertiesLtd shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhuhai Huafa PropertiesLtd's past performance and to peers in the same industry. We would highlight that Zhuhai Huafa PropertiesLtd's revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last five years. Compare this to the 123 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it looks like Zhuhai Huafa PropertiesLtd is forecast to grow at about the same rate as 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 Zhuhai Huafa PropertiesLtd's earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zhuhai Huafa PropertiesLtd's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Zhuhai Huafa PropertiesLtd going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for Zhuhai Huafa PropertiesLtd that we have uncovered.
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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.