Last week saw the newest full-year earnings release from Guangzhou Haige Communications Group Incorporated Company (SZSE:002465), an important milestone in the company's journey to build a stronger business. It was a pretty mixed result, with revenues beating expectations to hit CN¥6.4b. Statutory earnings fell 3.8% short of analyst forecasts, reaching CN¥0.30 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Guangzhou Haige Communications Group's five analysts are now forecasting revenues of CN¥7.55b in 2024. This would be a notable 17% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 24% to CN¥0.35. In the lead-up to this report, the analysts had been modelling revenues of CN¥7.41b and earnings per share (EPS) of CN¥0.38 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 9.5% to CN¥13.64, suggesting the revised estimates are not indicative of a weaker long-term future for the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Guangzhou Haige Communications Group, with the most bullish analyst valuing it at CN¥14.00 and the most bearish at CN¥13.45 per share. This is a very narrow spread of estimates, implying either that Guangzhou Haige Communications Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guangzhou Haige Communications Group's past performance and to peers in the same industry. The analysts are definitely expecting Guangzhou Haige Communications Group's growth to accelerate, with the forecast 17% annualised growth to the end of 2024 ranking favourably alongside historical growth of 8.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 23% annually. So it's clear that despite the acceleration in growth, Guangzhou Haige Communications Group is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Guangzhou Haige Communications Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Guangzhou Haige Communications Group going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Guangzhou Haige Communications Group you should know about.
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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.