Shougang Fushan Resources Group Limited (HKG:639) 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. Results look mixed - while revenue fell marginally short of analyst estimates at HK$5.1b, statutory earnings were in line with expectations, at HK$0.30 per share. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the three analysts covering Shougang Fushan Resources Group provided consensus estimates of HK$4.40b revenue in 2025, which would reflect a not inconsiderable 13% decline over the past 12 months. Statutory earnings per share are expected to dive 27% to HK$0.21 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$5.53b and earnings per share (EPS) of HK$0.32 in 2025. It looks like sentiment has declined substantially in the aftermath of these results, with a large cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.
See our latest analysis for Shougang Fushan Resources Group
The analysts made no major changes to their price target of HK$3.31, suggesting the downgrades are not expected to have a long-term impact on Shougang Fushan Resources Group's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Shougang Fushan Resources Group analyst has a price target of HK$3.52 per share, while the most pessimistic values it at HK$3.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 13% annualised decline to the end of 2025. That is a notable change from historical growth of 7.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Shougang Fushan Resources Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment 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. 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 Shougang Fushan Resources Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Shougang Fushan Resources Group going out to 2027, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Shougang Fushan Resources Group (at least 1 which shouldn't be ignored) , and understanding these should be part of your investment process.
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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.