China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) shareholders are probably feeling a little disappointed, since its shares fell 3.2% to S$0.91 in the week after its latest yearly results. Revenues were US$14b, approximately in line with whatthe analyst expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.068, an impressive 26% ahead of estimates. Following the result, the analyst has 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. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from China Aviation Oil (Singapore)'s solitary analyst is for revenues of US$15.2b in 2024. This reflects an okay 5.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 21% to US$0.083. Before this earnings report, the analyst had been forecasting revenues of US$20.1b and earnings per share (EPS) of US$0.09 in 2024. Indeed, we can see that sentiment has declined measurably after results came out, with a pretty serious reduction to revenue estimates and a small dip in EPS estimates to boot.
Despite the cuts to forecast earnings, there was no real change to the S$1.08 price target, showing that the analyst doesn't think the changes have a meaningful impact on its intrinsic value.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that China Aviation Oil (Singapore)'s rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.4% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 6.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 1.8% per year. So although China Aviation Oil (Singapore) is expected to return to growth, it's also expected to grow revenues during a time when the wider industry is estimated to see revenue decline.
The Bottom Line
The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Aviation Oil (Singapore). Unfortunately, they also downgraded their revenue estimates, and our data indicates that is expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
We also provide an overview of the China Aviation Oil (Singapore) Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.