It's been a good week for Shenzhen Expressway Corporation Limited (HKG:548) shareholders, because the company has just released its latest annual results, and the shares gained 2.5% to HK$6.91. Revenues were CN¥9.3b, and Shenzhen Expressway was a dismal 10% short of 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, Shenzhen Expressway's four analysts currently expect revenues in 2024 to be CN¥9.34b, approximately in line with the last 12 months. Per-share earnings are expected to grow 12% to CN¥1.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥11.4b and earnings per share (EPS) of CN¥1.19 in 2024. So there's been a clear change in sentiment after these results, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.
The consensus has reconfirmed its price target of HK$8.52, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Shenzhen Expressway's market value. 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. Currently, the most bullish analyst values Shenzhen Expressway at HK$9.04 per share, while the most bearish prices it at HK$8.06. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Shenzhen Expressway's revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2024 being well below the historical 13% 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 5.3% 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 Shenzhen Expressway.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at HK$8.52, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Shenzhen Expressway analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that Shenzhen Expressway is showing 2 warning signs in our investment analysis , and 1 of those is significant...
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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.