China Everbright Environment Group Limited (HKG:257) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of HK$30b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at HK$0.55, missing estimates by 5.5%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, China Everbright Environment Group's ten analysts are forecasting 2025 revenues to be HK$29.8b, approximately in line with the last 12 months. Per-share earnings are expected to grow 20% to HK$0.66. In the lead-up to this report, the analysts had been modelling revenues of HK$30.0b and earnings per share (EPS) of HK$0.67 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
View our latest analysis for China Everbright Environment Group
It might be a surprise to learn that the consensus price target was broadly unchanged at HK$4.35, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values China Everbright Environment Group at HK$4.80 per share, while the most bearish prices it at HK$4.10. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Everbright Environment Group's past performance and to peers in the same industry. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 7.5% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.8% annually. So while a broad number of companies are forecast to grow, unfortunately China Everbright Environment Group is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Everbright Environment Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that China Everbright Environment Group's revenue is expected to perform worse than the wider industry. The consensus price target held steady at HK$4.35, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for China Everbright Environment Group going out to 2027, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for China Everbright Environment Group (of which 1 is a bit unpleasant!) you should know about.
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