Hangzhou Huawang New Material Technology Co.,Ltd. (SHSE:605377) just released its latest yearly report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥3.8b, statutory earnings missed forecasts by 13%, coming in at just CN¥1.01 per share. Following the result, the analysts have 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hangzhou Huawang New Material TechnologyLtd after the latest results.

Taking into account the latest results, the most recent consensus for Hangzhou Huawang New Material TechnologyLtd from three analysts is for revenues of CN¥4.04b in 2025. If met, it would imply a satisfactory 7.3% increase on its revenue over the past 12 months. Statutory earnings per share are expected to drop 16% to CN¥0.84 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.37b and earnings per share (EPS) of CN¥1.29 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 13% to CN¥13.75. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Hangzhou Huawang New Material TechnologyLtd, with the most bullish analyst valuing it at CN¥14.50 and the most bearish at CN¥13.00 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.

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. We would highlight that Hangzhou Huawang New Material TechnologyLtd's revenue growth is expected to slow, with the forecast 7.3% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 14% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hangzhou Huawang New Material TechnologyLtd.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hangzhou Huawang New Material TechnologyLtd. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Hangzhou Huawang New Material TechnologyLtd's future valuation.

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 estimates - from multiple Hangzhou Huawang New Material TechnologyLtd analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Hangzhou Huawang New Material TechnologyLtd .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.