It's been a good week for Haidilao International Holding Ltd. (HKG:6862) shareholders, because the company has just released its latest yearly results, and the shares gained 4.5% to HK$18.02. Haidilao International Holding missed revenue estimates by 3.9%, coming in atCN¥43b, although statutory earnings per share (EPS) of CN¥0.87 beat expectations, coming in 5.8% ahead of analyst estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the 31 analysts covering Haidilao International Holding are now predicting revenues of CN¥45.6b in 2025. If met, this would reflect a satisfactory 6.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 12% to CN¥0.95. Before this earnings report, the analysts had been forecasting revenues of CN¥47.7b and earnings per share (EPS) of CN¥0.93 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
View our latest analysis for Haidilao International Holding
The average price target increased 14% to HK$19.47, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. 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. The most optimistic Haidilao International Holding analyst has a price target of HK$24.14 per share, while the most pessimistic values it at HK$14.34. 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. We would highlight that Haidilao International Holding's revenue growth is expected to slow, with the forecast 6.6% annualised growth rate until the end of 2025 being well below the historical 9.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. Factoring in the forecast slowdown in growth, it seems obvious that Haidilao International Holding is also expected to grow slower than other industry participants.
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 Haidilao International Holding following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Haidilao International Holding. Long-term earnings power is much more important than next year's profits. We have forecasts for Haidilao International Holding going out to 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Haidilao International Holding that we have uncovered.
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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.