Anhui Huaheng Biotechnology Co., Ltd. (SHSE:688639) just released its latest second-quarter report and things are not looking great. Anhui Huaheng Biotechnology delivered a grave earnings miss, with both revenues (CN¥515m) and statutory earnings per share (CN¥0.40) falling badly short of analyst expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following the latest results, Anhui Huaheng Biotechnology's seven analysts are now forecasting revenues of CN¥2.82b in 2024. This would be a substantial 34% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 5.1% to CN¥1.88. Before this earnings report, the analysts had been forecasting revenues of CN¥3.17b and earnings per share (EPS) of CN¥2.77 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

The consensus price target fell 23% to CN¥71.99, with the weaker earnings outlook clearly leading valuation estimates. 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. Currently, the most bullish analyst values Anhui Huaheng Biotechnology at CN¥96.55 per share, while the most bearish prices it at CN¥43.56. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Anhui Huaheng Biotechnology's rate of growth is expected to accelerate meaningfully, with the forecast 79% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 37% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Anhui Huaheng Biotechnology is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Anhui Huaheng Biotechnology. They also downgraded Anhui Huaheng Biotechnology's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Anhui Huaheng Biotechnology's future valuation.

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 Anhui Huaheng Biotechnology analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Anhui Huaheng Biotechnology (2 can't be ignored) 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.