3SBio Inc. (HKG:1530) defied analyst predictions to release its full-year results, which were ahead of market expectations. The company beat expectations with revenues of CN¥9.1b arriving 2.3% ahead of forecasts. Statutory earnings per share (EPS) were CN¥0.85, 2.0% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, 3SBio's ten analysts are now forecasting revenues of CN¥10.2b in 2025. This would be a notable 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 11% to CN¥0.98. Before this earnings report, the analysts had been forecasting revenues of CN¥9.83b and earnings per share (EPS) of CN¥0.94 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Check out our latest analysis for 3SBio
With these upgrades, we're not surprised to see that the analysts have lifted their price target 25% to HK$10.80per share. 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 3SBio at HK$14.18 per share, while the most bearish prices it at HK$7.82. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of 3SBio'shistorical trends, as the 12% annualised revenue growth to the end of 2025 is roughly in line with the 11% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 25% per year. So although 3SBio is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards 3SBio following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 3SBio going out to 2027, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.