The analysts covering Zhuzhou Kibing Group Co.,Ltd (SHSE:601636) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, Zhuzhou Kibing GroupLtd's ten analysts currently expect revenues in 2024 to be CN¥16b, approximately in line with the last 12 months. Statutory earnings per share are anticipated to dive 51% to CN¥0.39 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥20b and earnings per share (EPS) of CN¥0.73 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 12% to CN¥8.02.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Zhuzhou Kibing GroupLtd's revenue growth is expected to slow, with the forecast 1.0% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Zhuzhou Kibing GroupLtd.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Zhuzhou Kibing GroupLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Zhuzhou Kibing GroupLtd's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Zhuzhou Kibing GroupLtd, including concerns around earnings quality. Learn more, and discover the 1 other risk we've identified, 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.