The yearly results for Asia Cement (China) Holdings Corporation (HKG:743) were released last week, making it a good time to revisit its performance. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥7.4b, statutory earnings were in line with expectations, at CN¥0.068 per share. The analyst 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. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
SEHK:743 Earnings and Revenue Growth March 6th 2024
After the latest results, the consensus from Asia Cement (China) Holdings' sole analyst is for revenues of CN¥7.12b in 2024, which would reflect a discernible 4.2% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to swell 20% to CN¥0.081. In the lead-up to this report, the analyst had been modelling revenues of CN¥7.52b and earnings per share (EPS) of CN¥0.083 in 2024. The analyst are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Despite the cuts to forecast earnings, there was no real change to the HK$2.40 price target, showing that the analyst doesn't think the changes have a meaningful impact on its intrinsic value.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 6.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 2.2% per year. So while a broad number of companies are forecast to grow, unfortunately Asia Cement (China) Holdings is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at HK$2.40, with the latest estimates not enough to have an impact on their price target.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
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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.
