Hla Group Corp., Ltd. (SHSE:600398) came out with its half-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a workmanlike result, with revenues of CN¥11b coming in 5.3% ahead of expectations, and statutory earnings per share of CN¥0.48, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Hla Group
Following the latest results, Hla Group's nine analysts are now forecasting revenues of CN¥21.8b in 2023. This would be a modest 6.5% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CN¥0.66, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CN¥21.9b and earnings per share (EPS) of CN¥0.65 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of CN¥8.31, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hla Group, with the most bullish analyst valuing it at CN¥9.60 and the most bearish at CN¥6.10 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. The analysts are definitely expecting Hla Group's growth to accelerate, with the forecast 13% annualised growth to the end of 2023 ranking favourably alongside historical growth of 0.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 18% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Hla Group is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Hla Group's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 forecasts for Hla Group going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Hla Group , and understanding it should be part of your investment process.
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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.