The third-quarter results for China Film Co., Ltd. (SHSE:600977) were released last week, making it a good time to revisit its performance. Revenues were CN¥893m, 21% shy of what the analysts were expecting, although statutory earnings of CN¥0.14 per share were roughly in line with what was forecast. 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.
Taking into account the latest results, the most recent consensus for China Film from five analysts is for revenues of CN¥6.35b in 2025. If met, it would imply a major 53% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 11,159% to CN¥0.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.68b and earnings per share (EPS) of CN¥0.50 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
What's most unexpected is that the consensus price target rose 8.4% to CN¥10.81, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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 China Film at CN¥13.34 per share, while the most bearish prices it at CN¥6.20. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that China Film is forecast to grow faster in the future than it has in the past, with revenues expected to display 41% annualised growth until the end of 2025. If achieved, this would be a much better result than the 10% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 14% annually. So it looks like China Film is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 China Film going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for China Film you should be aware of, and 1 of them is potentially serious.
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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.
