Shareholders might have noticed that Hangcha Group Co., Ltd (SHSE:603298) filed its quarterly result this time last week. The early response was not positive, with shares down 3.8% to CN¥15.97 in the past week. Revenues were CN¥4.4b, 13% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥1.31 being in line with what the analysts forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hangcha Group after the latest results.
Following the latest results, Hangcha Group's ten analysts are now forecasting revenues of CN¥17.7b in 2024. This would be an okay 6.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.1% to CN¥1.55. Before this earnings report, the analysts had been forecasting revenues of CN¥18.8b and earnings per share (EPS) of CN¥1.56 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The average price target was reduced 6.6% to CN¥22.55, with the lower revenue forecasts indicating negative sentiment towards Hangcha Group, even though earnings forecasts were unchanged. 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 Hangcha Group, with the most bullish analyst valuing it at CN¥26.43 and the most bearish at CN¥18.40 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hangcha Group's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Hangcha Group'shistorical trends, as the 14% annualised revenue growth to the end of 2024 is roughly in line with the 13% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% annually. So although Hangcha Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Even so, earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Hangcha Group 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 Hangcha Group 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.