The analysts might have been a bit too bullish on China Resources Microelectronics Limited (SHSE:688396), given that the company fell short of expectations when it released its third-quarter results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥2.7b, statutory earnings missed forecasts by an incredible 44%, coming in at just CN¥0.17 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on China Resources Microelectronics after the latest results.
Taking into account the latest results, the most recent consensus for China Resources Microelectronics from nine analysts is for revenues of CN¥11.7b in 2025. If met, it would imply a solid 19% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 62% to CN¥1.13. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥11.7b and earnings per share (EPS) of CN¥1.27 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.3% to CN¥41.05, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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 Resources Microelectronics at CN¥56.40 per share, while the most bearish prices it at CN¥28.10. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting China Resources Microelectronics' growth to accelerate, with the forecast 15% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 24% annually. So it's clear that despite the acceleration in growth, China Resources Microelectronics is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Resources Microelectronics. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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. We have estimates - from multiple China Resources Microelectronics analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for China Resources Microelectronics that we have uncovered.
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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.
