Guangdong Huate Gas Co., Ltd (SHSE:688268) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. Guangdong Huate Gas delivered a grave earnings miss, with both revenues (CN¥389m) and statutory earnings per share (CN¥0.39) 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.
Check out our latest analysis for Guangdong Huate Gas
Taking into account the latest results, the most recent consensus for Guangdong Huate Gas from six analysts is for revenues of CN¥2.31b in 2024. If met, it would imply a major 51% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 115% to CN¥2.53. Before this earnings report, the analysts had been forecasting revenues of CN¥2.41b and earnings per share (EPS) of CN¥2.66 in 2024. 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 CN¥83.75 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Guangdong Huate Gas, with the most bullish analyst valuing it at CN¥99.50 and the most bearish at CN¥75.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guangdong Huate Gas' past performance and to peers in the same industry. It's clear from the latest estimates that Guangdong Huate Gas' rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 20% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Guangdong Huate Gas to grow faster than 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. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Guangdong Huate Gas going out to 2025, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Guangdong Huate Gas 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.
