Anhui Conch Cement Company Limited Just Missed Earnings - But Analysts Have Updated Their Models

Simply Wall St ·  Mar 21 18:30

Anhui Conch Cement Company Limited (HKG:914) shareholders are probably feeling a little disappointed, since its shares fell 5.3% to HK$16.92 in the week after its latest full-year results. Statutory earnings per share of CN¥1.97 unfortunately missed expectations by 11%, although it was encouraging to see revenues of CN¥141b exceed expectations by 9.8%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

SEHK:914 Earnings and Revenue Growth March 21st 2024

Following last week's earnings report, Anhui Conch Cement's twelve analysts are forecasting 2024 revenues to be CN¥139.8b, approximately in line with the last 12 months. Statutory per share are forecast to be CN¥1.94, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CN¥130.4b and earnings per share (EPS) of CN¥2.13 in 2024. So it's pretty clear consensus is mixed on Anhui Conch Cement after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

There's been no major changes to the price target of HK$22.75, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Anhui Conch Cement, with the most bullish analyst valuing it at HK$32.50 and the most bearish at HK$14.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 1.5% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 3.6% annually. So while a broad number of companies are forecast to grow, unfortunately Anhui Conch Cement is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Anhui Conch Cement. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at HK$22.75, 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 Anhui Conch Cement analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Anhui Conch Cement you should be aware of.

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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.

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