Shareholders might have noticed that Anhui Conch Cement Company Limited (HKG:914) filed its half-year result this time last week. The early response was not positive, with shares down 3.3% to HK$16.52 in the past week. It was a curious result overall, with revenues coming in an incredible 27% below what the analysts had expected, at CN¥46b. Statutory earnings per share beat analyst models by 47% to hit CN¥0.66. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following the latest results, Anhui Conch Cement's 14 analysts are now forecasting revenues of CN¥129.3b in 2024. This would be a reasonable 6.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 25% to CN¥1.78. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥138.1b and earnings per share (EPS) of CN¥1.89 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The consensus price target fell 5.7% to HK$21.64, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Anhui Conch Cement at HK$28.00 per share, while the most bearish prices it at HK$16.06. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Anhui Conch Cement is forecast to grow faster in the future than it has in the past, with revenues expected to display 14% annualised growth until the end of 2024. If achieved, this would be a much better result than the 5.0% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.5% annually. So it looks like Anhui Conch Cement is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Anhui Conch Cement'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 Conch Cement's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Anhui Conch Cement. 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 Anhui Conch Cement going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Anhui Conch Cement that you need to take into consideration.

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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.