Last week saw the newest annual earnings release from Metallurgical Corporation of China Ltd. (HKG:1618), an important milestone in the company's journey to build a stronger business. The result was fairly weak overall, with revenues of CN¥634b being 5.9% less than what the analysts had been modelling. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Metallurgical Corporation of China after the latest results.
Following the latest results, Metallurgical Corporation of China's eight analysts are now forecasting revenues of CN¥720.9b in 2024. This would be a notable 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 9.8% to CN¥0.46. In the lead-up to this report, the analysts had been modelling revenues of CN¥775.8b and earnings per share (EPS) of CN¥0.65 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 10% to HK$2.07. 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. There are some variant perceptions on Metallurgical Corporation of China, with the most bullish analyst valuing it at HK$2.13 and the most bearish at HK$2.01 per share. This is a very narrow spread of estimates, implying either that Metallurgical Corporation of China is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 17% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 32% annually. So it's pretty clear that Metallurgical Corporation of China is expected to grow slower than similar companies in the same 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 forecasts for Metallurgical Corporation of China going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Metallurgical Corporation of China .
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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.