Canvest Environmental Protection Group Company Limited (HKG:1381) just released its latest yearly report and things are not looking great. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of HK$5.0b missed by 19%, and statutory earnings per share of HK$0.41 fell short of forecasts by 20%. 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.
Taking into account the latest results, the most recent consensus for Canvest Environmental Protection Group from six analysts is for revenues of HK$5.90b in 2024. If met, it would imply a decent 19% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 36% to HK$0.56. Before this earnings report, the analysts had been forecasting revenues of HK$6.07b and earnings per share (EPS) of HK$0.58 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Despite the cuts to forecast earnings, there was no real change to the HK$4.87 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Canvest Environmental Protection Group, with the most bullish analyst valuing it at HK$5.40 and the most bearish at HK$4.50 per share. This is a very narrow spread of estimates, implying either that Canvest Environmental Protection Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Canvest Environmental Protection Group's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 15% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Canvest Environmental Protection Group is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Canvest Environmental Protection Group's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at HK$4.87, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Canvest Environmental Protection Group going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Canvest Environmental Protection Group that we have uncovered.
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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.