As you might know, Shenzhen Kangtai Biological Products Co., Ltd. (SZSE:300601) last week released its latest quarterly, and things did not turn out so great for shareholders. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥750m) coming in 20% below what they had expected. Statutory earnings per share of CN¥0.10 fell 40% short. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Shenzhen Kangtai Biological Products after the latest results.
Taking into account the latest results, the current consensus from Shenzhen Kangtai Biological Products' nine analysts is for revenues of CN¥4.11b in 2024. This would reflect a major 39% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 115% to CN¥0.99. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥4.33b and earnings per share (EPS) of CN¥1.01 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
It will come as no surprise then, that the consensus price target fell 7.2% to CN¥23.79following these changes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Shenzhen Kangtai Biological Products at CN¥33.69 per share, while the most bearish prices it at CN¥16.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Shenzhen Kangtai Biological Products' growth to accelerate, with the forecast 94% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% 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 grow their revenue at 25% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Shenzhen Kangtai Biological Products is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Shenzhen Kangtai Biological Products. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Shenzhen Kangtai Biological Products going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Shenzhen Kangtai Biological Products , and understanding them should be part of your investment process.
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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.