Shareholders of Jiangsu Kanion Pharmaceutical Co.,Ltd. (SHSE:600557) will be pleased this week, given that the stock price is up 14% to CN¥21.41 following its latest full-year results. Jiangsu Kanion PharmaceuticalLtd reported CN¥4.9b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥0.93 beat expectations, being 4.5% higher than what the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the eight analysts covering Jiangsu Kanion PharmaceuticalLtd are now predicting revenues of CN¥5.73b in 2024. If met, this would reflect a solid 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 21% to CN¥1.12. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥5.90b and earnings per share (EPS) of CN¥1.09 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.
There's been no real change to the average price target of CN¥25.55, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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. Currently, the most bullish analyst values Jiangsu Kanion PharmaceuticalLtd at CN¥28.09 per share, while the most bearish prices it at CN¥23.00. This is a very narrow spread of estimates, implying either that Jiangsu Kanion PharmaceuticalLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Jiangsu Kanion PharmaceuticalLtd's growth to accelerate, with the forecast 18% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.1% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 15% per year. Jiangsu Kanion PharmaceuticalLtd 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 Jiangsu Kanion PharmaceuticalLtd's earnings potential next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Yet - earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Jiangsu Kanion PharmaceuticalLtd. 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 Jiangsu Kanion PharmaceuticalLtd going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Jiangsu Kanion PharmaceuticalLtd has 1 warning sign we think you should be aware of.
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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.