One thing we could say about the analysts on Anhui Conch Cement Company Limited (HKG:914) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After this downgrade, Anhui Conch Cement's twelve analysts are now forecasting revenues of CN¥102b in 2025. This would be a meaningful 12% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 38% to CN¥2.11. Prior to this update, the analysts had been forecasting revenues of CN¥117b and earnings per share (EPS) of CN¥2.07 in 2025. It looks like there's been a meaningful change to the consensus view following the recent earnings report, with the analysts making a substantial drop in to revenue forecasts and a slight bump in to this year's earnings estimates.
Check out our latest analysis for Anhui Conch Cement
The consensus has made no major changes to the price target of CN¥24.36, suggesting the forecast improvement in earnings is expected to offset the decline in revenues this year. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Anhui Conch Cement at CN¥29.33 per share, while the most bearish prices it at CN¥17.81. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Anhui Conch Cement's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 12% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 8.4% 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 4.2% annually. Not only are Anhui Conch Cement's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Anhui Conch Cement after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Anhui Conch Cement analysts - going out to 2027, and you can see them free on our platform here.
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