Ascentage Pharma Group International (HKG:6855) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Ascentage Pharma Group International too, with the stock up 22% to HK$33.90 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from Ascentage Pharma Group International's four analysts is for revenues of CN¥1.0b in 2024 which - if met - would reflect a notable 13% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 15% per share from last year to CN¥0.99. Yet prior to the latest estimates, the analysts had been forecasting revenues of CN¥727m and losses of CN¥1.77 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

It will come as no surprise to learn that the analysts have increased their price target for Ascentage Pharma Group International 21% to CN¥34.88 on the back of these upgrades. 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 Ascentage Pharma Group International, with the most bullish analyst valuing it at CN¥37.44 and the most bearish at CN¥31.77 per share. With such a narrow range of valuations, 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 Ascentage Pharma Group International's past performance and to peers in the same industry. We would highlight that Ascentage Pharma Group International's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2024 being well below the historical 73% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 27% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Ascentage Pharma Group International.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Ascentage Pharma Group International's prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Ascentage Pharma Group International could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Ascentage Pharma Group International analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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