Sinotrans Limited (HKG:598) shareholders are probably feeling a little disappointed, since its shares fell 9.2% to HK$3.56 in the week after its latest third-quarter results. Results overall were respectable, with statutory earnings of CN¥0.58 per share roughly in line with what the analysts had forecast. Revenues of CN¥30b came in 2.2% ahead of analyst predictions. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sinotrans after the latest results.

Taking into account the latest results, the current consensus from Sinotrans' six analysts is for revenues of CN¥119.3b in 2025. This would reflect a reasonable 3.9% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 13% to CN¥0.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥119.9b and earnings per share (EPS) of CN¥0.64 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at HK$4.31, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Sinotrans, with the most bullish analyst valuing it at HK$5.07 and the most bearish at HK$3.20 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Sinotrans' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.1% growth on an annualised basis. This is compared to a historical growth rate of 6.3% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Sinotrans is also expected to grow slower than other industry participants.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sinotrans' revenue is expected to perform worse than the wider industry. The consensus price target held steady at HK$4.31, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Sinotrans 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 Sinotrans 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.