Anhui Honglu Steel Construction(Group) CO., LTD (SZSE:002541) just released its latest quarterly report and things are not looking great. Results showed a clear earnings miss, with CN¥5.6b revenue coming in 5.1% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.33 missed the mark badly, arriving some 24% below what was expected. 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.
Following the latest results, Anhui Honglu Steel Construction(Group)'s ten analysts are now forecasting revenues of CN¥26.2b in 2025. This would be a solid 17% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 27% to CN¥1.75. In the lead-up to this report, the analysts had been modelling revenues of CN¥26.3b and earnings per share (EPS) of CN¥1.77 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at CN¥20.23. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Anhui Honglu Steel Construction(Group) analyst has a price target of CN¥26.52 per share, while the most pessimistic values it at CN¥14.50. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Anhui Honglu Steel Construction(Group)'s revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2025 being well below the historical 16% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.6% per year. Even after the forecast slowdown in growth, it seems obvious that Anhui Honglu Steel Construction(Group) is also expected to grow faster than the wider 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CN¥20.23, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Anhui Honglu Steel Construction(Group) going out to 2026, and you can see them free on our platform here.
Even so, be aware that Anhui Honglu Steel Construction(Group) is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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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.
