The latest analyst coverage could presage a bad day for Chanjet Information Technology Company Limited (HKG:1588), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Surprisingly the share price has been buoyant, rising 14% to HK$3.65 in the past 7 days. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.
After this downgrade, Chanjet Information Technology's sole analyst is now forecasting revenues of CN¥834m in 2022. This would be a decent 17% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analyst was forecasting revenues of CN¥940m in 2022. It looks like forecasts have become a fair bit less optimistic on Chanjet Information Technology, given the measurable cut to revenue estimates.
View our latest analysis for Chanjet Information TechnologySEHK:1588 Earnings and Revenue Growth November 2nd 2022
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 Chanjet Information Technology's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 6.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 26% per year. So it's clear that despite the acceleration in growth, Chanjet Information Technology is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing to take away is that the analyst cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Chanjet Information Technology after today.
Unsatisfied? One Chanjet Information Technology broker/analyst has provided estimates out to 2024, which can be seen for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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