Last week, you might have seen that Metallurgical Corporation of China Ltd. (HKG:1618) released its annual result to the market. The early response was not positive, with shares down 3.6% to HK$1.35 in the past week. Statutory earnings per share fell badly short of expectations, coming in at CN¥0.26, some 32% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CN¥339b. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Metallurgical Corporation of China's five analysts are now forecasting revenues of CN¥386.0b in 2020. This would be a meaningful 14% improvement in sales compared to the last 12 months. Statutory per share are forecast to be CN¥0.27, approximately in line with the last 12 months. Prior to the latest earnings, the analysts were forecasting revenues of CN¥392.4b in 2020, and did not provide an earnings per share estimate. So we can see that while the consensus made no real change to its revenue estimates, the analystsbegan providing earnings per share estimates, suggesting a heightened focus on the business' earnings after the latest results.
The average the analysts price target fell 31% to HK$1.58, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Metallurgical Corporation of China'sgrowth to accelerate, with the forecast 14% growth ranking favourably alongside historical growth of 10.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Metallurgical Corporation of China is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us from these new estimates is the bullish forecast for profits next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Metallurgical Corporation of China's future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Metallurgical Corporation of China going out to 2022, and you can see them free on our platform here..
Even so, be aware that Metallurgical Corporation of China is showing 4 warning signs in our investment analysis , you should know about...
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.