It's shaping up to be a tough period for China Suntien Green Energy Corporation Limited (HKG:956), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Unfortunately, China Suntien Green Energy delivered a serious earnings miss. Revenues of CN¥21b were 13% below expectations, and statutory earnings per share of CN¥0.40 missed estimates by 27%. 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.
After the latest results, the seven analysts covering China Suntien Green Energy are now predicting revenues of CN¥27.7b in 2025. If met, this would reflect a major 30% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 43% to CN¥0.56. Before this earnings report, the analysts had been forecasting revenues of CN¥28.3b and earnings per share (EPS) of CN¥0.65 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
View our latest analysis for China Suntien Green Energy
Despite the cuts to forecast earnings, there was no real change to the HK$4.04 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. Currently, the most bullish analyst values China Suntien Green Energy at HK$4.49 per share, while the most bearish prices it at HK$3.44. This is a very narrow spread of estimates, implying either that China Suntien Green Energy is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. It's clear from the latest estimates that China Suntien Green Energy's rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 14% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.6% annually. So it's clear with the acceleration in growth, China Suntien Green Energy is expected to grow meaningfully faster than the wider 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 Suntien Green Energy. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on China Suntien Green Energy. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple China Suntien Green Energy analysts - going out to 2027, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for China Suntien Green Energy (1 is a bit concerning!) that you need to be mindful 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.