One thing we could say about the analysts on Asia-potash International Investment (Guangzhou)Co.,Ltd. (SZSE:000893) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. At CN¥19.04, shares are up 7.0% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Following the downgrade, the latest consensus from Asia-potash International Investment (Guangzhou)Co.Ltd's seven analysts is for revenues of CN¥4.1b in 2024, which would reflect a solid 12% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to shrink 8.2% to CN¥0.98 in the same period. Previously, the analysts had been modelling revenues of CN¥6.4b and earnings per share (EPS) of CN¥2.48 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a large cut to earnings per share numbers as well.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Asia-potash International Investment (Guangzhou)Co.Ltd's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Asia-potash International Investment (Guangzhou)Co.Ltd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 51% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. Factoring in the forecast slowdown in growth, it seems obvious that Asia-potash International Investment (Guangzhou)Co.Ltd is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Asia-potash International Investment (Guangzhou)Co.Ltd, and their negativity could be grounds for caution.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Asia-potash International Investment (Guangzhou)Co.Ltd's financials, such as concerns around earnings quality. For more information, you can click here to discover this and the 1 other warning sign we've identified.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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