It's been a good week for Chongqing Baiya Sanitary Products Co., Ltd. (SZSE:003006) shareholders, because the company has just released its latest annual results, and the shares gained 3.9% to CN¥16.95. Chongqing Baiya Sanitary Products beat revenue expectations by 5.6%, at CN¥2.1b. Statutory earnings per share (EPS) came in at CN¥0.56, some 4.4% short of analyst estimates. Following the result, the analysts have 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Chongqing Baiya Sanitary Products' six analysts are now forecasting revenues of CN¥2.67b in 2024. This would be a substantial 24% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 24% to CN¥0.69. Before this earnings report, the analysts had been forecasting revenues of CN¥2.66b and earnings per share (EPS) of CN¥0.68 in 2024. 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.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 53% to CN¥20.00. It looks as though they previously had some doubts over whether the business would live up to their 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. Currently, the most bullish analyst values Chongqing Baiya Sanitary Products at CN¥22.00 per share, while the most bearish prices it at CN¥18.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Chongqing Baiya Sanitary Products' past performance and to peers in the same industry. The analysts are definitely expecting Chongqing Baiya Sanitary Products' growth to accelerate, with the forecast 24% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Chongqing Baiya Sanitary Products is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Chongqing Baiya Sanitary Products. Long-term earnings power is much more important than next year's profits. We have forecasts for Chongqing Baiya Sanitary Products going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Chongqing Baiya Sanitary Products has 1 warning sign we think you should be aware of.
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