The third-quarter results for Citic Pacific Special Steel Group Co., Ltd (SZSE:000708) were released last week, making it a good time to revisit its performance. Revenues came in 5.1% below expectations, at CN¥26b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥1.11 being roughly in line with analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Citic Pacific Special Steel Group's five analysts are now forecasting revenues of CN¥118.5b in 2025. This would be a reasonable 6.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 20% to CN¥1.24. Before this earnings report, the analysts had been forecasting revenues of CN¥119.1b and earnings per share (EPS) of CN¥1.28 in 2025. 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 minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target fell 15% to CN¥16.20, with the analysts clearly linking lower forecast earnings to the performance of the stock price.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Citic Pacific Special Steel Group's past performance and to peers in the same industry. We would highlight that Citic Pacific Special Steel Group's revenue growth is expected to slow, with the forecast 5.3% annualised growth rate until the end of 2025 being well below the historical 10% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Citic Pacific Special Steel Group is also expected to grow slower than other industry participants.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Citic Pacific Special Steel Group's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 estimates - from multiple Citic Pacific Special Steel Group analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Citic Pacific Special Steel Group that you should be aware of.
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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.
