It's been a good week for Chongqing Brewery Co., Ltd. (SHSE:600132) shareholders, because the company has just released its latest yearly results, and the shares gained 2.7% to CN¥65.95. Revenues of CN¥15b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥2.76, missing estimates by 7.1%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the consensus forecast from Chongqing Brewery's 25 analysts is for revenues of CN¥15.6b in 2024. This reflects a satisfactory 5.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 9.0% to CN¥3.01. Before this earnings report, the analysts had been forecasting revenues of CN¥15.6b and earnings per share (EPS) of CN¥3.02 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target fell 6.8% to CN¥75.42, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the annual results. 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 Chongqing Brewery, with the most bullish analyst valuing it at CN¥116 and the most bearish at CN¥50.73 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Chongqing Brewery's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Chongqing Brewery's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.2% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. Factoring in the forecast slowdown in growth, it seems obvious that Chongqing Brewery is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Chongqing Brewery's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Chongqing Brewery's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Chongqing Brewery. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Chongqing Brewery going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Chongqing Brewery you should know about.

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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.