It's been a good week for Songcheng Performance Development Co.,Ltd (SZSE:300144) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.0% to CN¥9.83. Songcheng Performance DevelopmentLtd missed revenue estimates by 6.5%, coming in atCN¥836m, although statutory earnings per share (EPS) of CN¥0.18 beat expectations, coming in 6.6% ahead of analyst estimates. 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.
Taking into account the latest results, the consensus forecast from Songcheng Performance DevelopmentLtd's 15 analysts is for revenues of CN¥2.91b in 2025. This reflects a huge 25% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 1,102% to CN¥0.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.00b and earnings per share (EPS) of CN¥0.53 in 2025. 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 analysts made no major changes to their price target of CN¥10.98, suggesting the downgrades are not expected to have a long-term impact on Songcheng Performance DevelopmentLtd's valuation. 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. The most optimistic Songcheng Performance DevelopmentLtd analyst has a price target of CN¥14.30 per share, while the most pessimistic values it at CN¥6.93. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Songcheng Performance DevelopmentLtd is forecast to grow faster in the future than it has in the past, with revenues expected to display 20% annualised growth until the end of 2025. If achieved, this would be a much better result than the 1.6% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 15% per year. Not only are Songcheng Performance DevelopmentLtd's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Songcheng Performance DevelopmentLtd. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Songcheng Performance DevelopmentLtd 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 4 warning signs for Songcheng Performance DevelopmentLtd that 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.
