It's been a mediocre week for Gushengtang Holdings Limited (HKG:2273) shareholders, with the stock dropping 13% to HK$31.50 in the week since its latest full-year results. It was not a great result overall. While revenues of CN¥3.0b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit CN¥1.22 per share. 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.
Taking into account the latest results, the most recent consensus for Gushengtang Holdings from 17 analysts is for revenues of CN¥3.77b in 2025. If met, it would imply a huge 25% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 23% to CN¥1.59. Before this earnings report, the analysts had been forecasting revenues of CN¥3.91b and earnings per share (EPS) of CN¥1.87 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.
See our latest analysis for Gushengtang Holdings
Despite the cuts to forecast earnings, there was no real change to the HK$52.84 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Gushengtang Holdings analyst has a price target of HK$66.66 per share, while the most pessimistic values it at HK$26.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 can infer from the latest estimates that forecasts expect a continuation of Gushengtang Holdings'historical trends, as the 25% annualised revenue growth to the end of 2025 is roughly in line with the 26% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.0% annually. So although Gushengtang Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow 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 Gushengtang Holdings. They also downgraded Gushengtang Holdings' revenue estimates, but industry data suggests that it is expected to grow faster 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.
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 estimates - from multiple Gushengtang Holdings analysts - 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 1 warning sign for Gushengtang Holdings you should know about.
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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.