Investors in Tsingtao Brewery Company Limited (HKG:168) had a good week, as its shares rose 3.3% to close at HK$45.20 following the release of its half-year results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥20b, statutory earnings were in line with expectations, at CN¥2.67 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Following the latest results, Tsingtao Brewery's 34 analysts are now forecasting revenues of CN¥33.9b in 2024. This would be a credible 4.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 5.0% to CN¥3.44. In the lead-up to this report, the analysts had been modelling revenues of CN¥34.9b and earnings per share (EPS) of CN¥3.56 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The consensus price target fell 6.4% to HK$66.39, with the weaker earnings outlook clearly leading valuation estimates. 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. Currently, the most bullish analyst values Tsingtao Brewery at HK$95.11 per share, while the most bearish prices it at HK$44.35. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Tsingtao Brewery's growth to accelerate, with the forecast 9.2% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.0% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.1% per year. Tsingtao Brewery is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tsingtao Brewery. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Tsingtao Brewery going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Tsingtao Brewery has 1 warning sign we think 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.