The analysts might have been a bit too bullish on CSPC Pharmaceutical Group Limited (HKG:1093), given that the company fell short of expectations when it released its third-quarter results last week. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥6.2b missed by 14%, and statutory earnings per share of CN¥0.063 fell short of forecasts by 38%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for CSPC Pharmaceutical Group from 28 analysts is for revenues of CN¥33.1b in 2025. If met, it would imply a meaningful 9.2% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 13% to CN¥0.50. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥34.0b and earnings per share (EPS) of CN¥0.52 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the HK$7.56 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on CSPC Pharmaceutical Group, with the most bullish analyst valuing it at HK$12.90 and the most bearish at HK$4.80 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on 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. We can infer from the latest estimates that forecasts expect a continuation of CSPC Pharmaceutical Group'shistorical trends, as the 7.3% annualised revenue growth to the end of 2025 is roughly in line with the 8.0% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.4% annually. So although CSPC Pharmaceutical 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 the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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.
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 CSPC Pharmaceutical Group analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that CSPC Pharmaceutical Group is showing 1 warning sign in our investment analysis , 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.
