Investors in Shanghai International Port (Group) Co., Ltd. (SHSE:600018) had a good week, as its shares rose 2.1% to close at CN¥5.40 following the release of its annual results. It was a pretty mixed result, with revenues beating expectations to hit CN¥38b. Statutory earnings fell 4.9% short of analyst forecasts, reaching CN¥0.57 per share. 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 Shanghai International Port (Group) after the latest results.
Following last week's earnings report, Shanghai International Port (Group)'s four analysts are forecasting 2024 revenues to be CN¥38.3b, approximately in line with the last 12 months. Per-share earnings are expected to increase 6.4% to CN¥0.60. Before this earnings report, the analysts had been forecasting revenues of CN¥36.6b and earnings per share (EPS) of CN¥0.59 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥5.11, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Shanghai International Port (Group), with the most bullish analyst valuing it at CN¥6.30 and the most bearish at CN¥4.30 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Shanghai International Port (Group)'s growth to accelerate, with the forecast 1.9% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.02% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.5% per year. So it's clear that despite the acceleration in growth, Shanghai International Port (Group) is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Shanghai International Port (Group) following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. 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.
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 forecasts for Shanghai International Port (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 1 warning sign for Shanghai International Port (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.