Shanghai Chicmax Cosmetic Co., Ltd. (HKG:2145) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the upgrade, the latest consensus from Shanghai Chicmax Cosmetic's six analysts is for revenues of CN¥6.9b in 2024, which would reflect a huge 131% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 316% to CN¥1.91. Previously, the analysts had been modelling revenues of CN¥5.6b and earnings per share (EPS) of CN¥1.57 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 17% to CN¥48.54 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Shanghai Chicmax Cosmetic at CN¥55.22 per share, while the most bearish prices it at CN¥43.24. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Shanghai Chicmax Cosmetic is an easy business to forecast or the underlying assumptions are obvious.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Shanghai Chicmax Cosmetic's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 131% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 1.6% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.0% per year. Not only are Shanghai Chicmax Cosmetic's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Shanghai Chicmax Cosmetic.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Shanghai Chicmax Cosmetic analysts - going out to 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.