Guangdong Huate Gas Co., Ltd (SHSE:688268) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. Guangdong Huate Gas reported an earnings miss, with CN¥1.5b revenues falling 13% short of analyst models, and statutory earnings per share (EPS) of CN¥1.43 also coming in slightly below expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 current consensus from Guangdong Huate Gas' seven analysts is for revenues of CN¥1.95b in 2024. This would reflect a huge 30% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 39% to CN¥1.98. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.86b and earnings per share (EPS) of CN¥2.15 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a huge to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.
The consensus price target fell 7.3% to CN¥69.81, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Guangdong Huate Gas analyst has a price target of CN¥78.23 per share, while the most pessimistic values it at CN¥56.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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 analysts are definitely expecting Guangdong Huate Gas' growth to accelerate, with the forecast 30% annualised growth to the end of 2024 ranking favourably alongside historical growth of 18% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Guangdong Huate Gas to grow faster than the wider 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Guangdong Huate Gas analysts - 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 Guangdong Huate Gas 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.