Shareholders might have noticed that Jinhong Gas Co.,Ltd. (SHSE:688106) filed its full-year result this time last week. The early response was not positive, with shares down 9.9% to CN¥18.66 in the past week. Revenues were in line with forecasts, at CN¥2.4b, although statutory earnings per share came in 13% below what the analysts expected, at CN¥0.63 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Jinhong GasLtd's six analysts are now forecasting revenues of CN¥2.98b in 2024. This would be a substantial 23% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 27% to CN¥0.83. Before this earnings report, the analysts had been forecasting revenues of CN¥2.97b and earnings per share (EPS) of CN¥0.84 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With no major changes to earnings forecasts, the consensus price target fell 5.5% to CN¥31.03, suggesting that the analysts might have previously been hoping for an earnings upgrade. 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 Jinhong GasLtd analyst has a price target of CN¥35.00 per share, while the most pessimistic values it at CN¥27.60. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Jinhong GasLtd's growth to accelerate, with the forecast 23% annualised growth to the end of 2024 ranking favourably alongside historical growth of 18% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Jinhong GasLtd is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still 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 Jinhong GasLtd's future valuation.
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 forecasts for Jinhong GasLtd going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Jinhong GasLtd you should be aware of, and 1 of them is concerning.
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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.
