Chongqing Water Group Co.,Ltd. (SHSE:601158) just released its latest full-year report and things are not looking great. Unfortunately, Chongqing Water GroupLtd delivered a serious earnings miss. Revenues of CN¥7.3b were 13% below expectations, and statutory earnings per share of CN¥0.23 missed estimates by 32%. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.
After the latest results, the solitary analyst covering Chongqing Water GroupLtd are now predicting revenues of CN¥7.88b in 2024. If met, this would reflect a notable 8.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 10% to CN¥0.25. Yet prior to the latest earnings, the analyst had been anticipated revenues of CN¥8.98b and earnings per share (EPS) of CN¥0.38 in 2024. Indeed, we can see that the analyst is a lot more bearish about Chongqing Water GroupLtd's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
The analyst made no major changes to their price target of CN¥7.33, suggesting the downgrades are not expected to have a long-term impact on Chongqing Water GroupLtd's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analyst, with revenue forecast to display 8.6% growth on an annualised basis. That is in line with its 9.2% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.3% annually. It's clear that while Chongqing Water GroupLtd's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at CN¥7.33, with the latest estimates not enough to have an impact on their price target.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Chongqing Water GroupLtd going out as far as 2026, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Chongqing Water GroupLtd that you need to take into consideration.
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