Shenzhou International Group Holdings Limited (HKG:2313) missed earnings with its latest half-yearly results, disappointing overly-optimistic forecasters. Shenzhou International Group Holdings missed analyst forecasts, with revenues of CN¥13b and statutory earnings per share (EPS) of CN¥1.95, falling short by 5.5% and 6.3% respectively. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following the latest results, Shenzhou International Group Holdings' 27 analysts are now forecasting revenues of CN¥27.6b in 2024. This would be a credible 4.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 7.8% to CN¥3.84. Before this earnings report, the analysts had been forecasting revenues of CN¥28.9b and earnings per share (EPS) of CN¥3.74 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus has made no major changes to the price target of HK$94.86, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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 Shenzhou International Group Holdings, with the most bullish analyst valuing it at HK$124 and the most bearish at HK$56.18 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 Shenzhou International Group Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 9.2% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.7% annually. Shenzhou International Group Holdings is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shenzhou International Group Holdings' earnings potential next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at HK$94.86, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Shenzhou International Group Holdings. 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 Shenzhou International Group Holdings 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 Shenzhou International Group Holdings 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.