The analysts might have been a bit too bullish on Centre Testing International Group Co. Ltd. (SZSE:300012), given that the company fell short of expectations when it released its quarterly results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥1.2b, statutory earnings missed forecasts by an incredible 25%, coming in at just CN¥0.079 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Centre Testing International Group after the latest results.
Following the latest results, Centre Testing International Group's 14 analysts are now forecasting revenues of CN¥6.38b in 2024. This would be a notable 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 17% to CN¥0.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.49b and earnings per share (EPS) of CN¥0.64 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
The consensus price target held steady at CN¥15.98, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Centre Testing International Group, with the most bullish analyst valuing it at CN¥23.50 and the most bearish at CN¥11.00 per share. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Centre Testing International Group's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 15% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 18% per year. So although Centre Testing International Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Centre Testing International Group. 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¥15.98, 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 estimates - from multiple Centre Testing International Group analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Centre Testing International Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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