Citic Press Corporation (SZSE:300788) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were CN¥402m, 16% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of CN¥0.61 being in line with what the analysts anticipated. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Citic Press' six analysts is for revenues of CN¥1.85b in 2024. This reflects a meaningful 9.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 37% to CN¥0.81. Before this earnings report, the analysts had been forecasting revenues of CN¥2.01b and earnings per share (EPS) of CN¥1.28 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the CN¥31.95 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Citic Press, with the most bullish analyst valuing it at CN¥33.54 and the most bearish at CN¥31.10 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Citic Press' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 12% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.5% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually. So while Citic Press' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at CN¥31.95, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Citic Press. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Citic Press analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Citic Press you should be aware of.
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