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Earnings Update: Haitian International Holdings Limited Just Reported And Analysts Are Trimming Their Forecasts

Simply Wall St

As you might know, Haitian International Holdings Limited (HKG:1882) last week released its latest full-year, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 3.8% short of analyst estimates at CN¥9.8b, and statutory earnings of CN¥1.10 per share missed forecasts by 2.5%. Earnings are an important time for investors, as they can track a company's performance, look at what top 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.

View our latest analysis for Haitian International Holdings

SEHK:1882 Past and Future Earnings, March 18th 2020

Taking into account the latest results, Haitian International Holdings's six analysts currently expect revenues in 2020 to be CN¥9.94b, approximately in line with the last 12 months. Statutory per share are forecast to be CN¥1.08, approximately in line with the last 12 months. Before this earnings report, analysts had been forecasting revenues of CN¥11.0b and earnings per share (EPS) of CN¥1.27 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a substantial drop in earnings per share forecasts.

It'll come as no surprise then, to learn that analysts have cut their price target 8.4% to CN¥17.19. 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 Haitian International Holdings analyst has a price target of CN¥21.74 per share, while the most pessimistic values it at CN¥12.82. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's pretty clear that analysts expect Haitian International Holdings's revenue growth will slow down substantially, with revenues next year expected to grow 1.3%, compared to a historical growth rate of 8.7% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Haitian International Holdings.

The Bottom Line

The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Haitian International Holdings. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Haitian International Holdings's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Haitian International Holdings going out to 2022, and you can see them free on our platform here..

You can also see our analysis of Haitian International Holdings's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.