It's been a good week for Huadong Medicine Co., Ltd (SZSE:000963) shareholders, because the company has just released its latest third-quarter results, and the shares gained 3.7% to CN¥34.22. Huadong Medicine missed revenue estimates by 5.3%, coming in atCN¥11b, although statutory earnings per share (EPS) of CN¥0.49 beat expectations, coming in 2.5% ahead of analyst estimates. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

After the latest results, the 15 analysts covering Huadong Medicine are now predicting revenues of CN¥47.3b in 2025. If met, this would reflect a solid 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 23% to CN¥2.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥47.5b and earnings per share (EPS) of CN¥2.23 in 2025. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CN¥43.45. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Huadong Medicine, with the most bullish analyst valuing it at CN¥50.22 and the most bearish at CN¥31.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. It's clear from the latest estimates that Huadong Medicine's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.6% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 12% per year. Huadong Medicine 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 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 real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CN¥43.45, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for Huadong Medicine going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Huadong Medicine that you need to take into consideration.

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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.