Investors in Hengdian Entertainment Co.,LTD (SHSE:603103) had a good week, as its shares rose 6.8% to close at CN¥12.28 following the release of its quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥450m, statutory earnings were in line with expectations, at CN¥0.26 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

After the latest results, the twin analysts covering Hengdian EntertainmentLTD are now predicting revenues of CN¥2.91b in 2025. If met, this would reflect a substantial 45% improvement in revenue compared to the last 12 months. Hengdian EntertainmentLTD is also expected to turn profitable, with statutory earnings of CN¥0.55 per share. Before this earnings report, the analysts had been forecasting revenues of CN¥3.10b and earnings per share (EPS) of CN¥0.67 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The consensus price target fell 9.4% to CN¥16.43, with the weaker earnings outlook clearly leading valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Hengdian EntertainmentLTD is forecast to grow faster in the future than it has in the past, with revenues expected to display 34% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.2% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 14% per year. Not only are Hengdian EntertainmentLTD's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hengdian EntertainmentLTD. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 Hengdian EntertainmentLTD's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Hengdian EntertainmentLTD you should know about.

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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.