Last week saw the newest yearly earnings release from Wanhua Chemical Group Co., Ltd. (SHSE:600309), an important milestone in the company's journey to build a stronger business. Revenues of CN¥175b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥5.36, missing estimates by 3.5%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Wanhua Chemical Group's 21 analysts is for revenues of CN¥199.7b in 2024. This would reflect a decent 14% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 20% to CN¥6.45. In the lead-up to this report, the analysts had been modelling revenues of CN¥199.5b and earnings per share (EPS) of CN¥6.65 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥108, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Wanhua Chemical Group, with the most bullish analyst valuing it at CN¥125 and the most bearish at CN¥95.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. We would highlight that Wanhua Chemical Group's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2024 being well below the historical 24% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Wanhua Chemical Group.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Wanhua Chemical Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥108, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Wanhua Chemical Group going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 3 warning signs we've spotted with Wanhua Chemical Group (including 1 which is a bit concerning) .
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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.