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Shandong Weigao Group Medical Polymer Company Limited (HKG:1066) Full-Year Results: Here's What Analysts Are Forecasting For This Year

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·4 min read
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As you might know, Shandong Weigao Group Medical Polymer Company Limited (HKG:1066) recently reported its yearly numbers. Revenues of CN¥10b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥0.41, missing estimates by 3.2%. 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.

View our latest analysis for Shandong Weigao Group Medical Polymer

SEHK:1066 Past and Future Earnings April 1st 2020
SEHK:1066 Past and Future Earnings April 1st 2020

Taking into account the latest results, the most recent consensus for Shandong Weigao Group Medical Polymer from eight analysts is for revenues of CN¥11.9b in 2020 which, if met, would be a notable 15% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 19% to CN¥0.49. Before this earnings report, the analysts had been forecasting revenues of CN¥11.9b and earnings per share (EPS) of CN¥0.50 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at CN¥9.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Shandong Weigao Group Medical Polymer analyst has a price target of CN¥12.72 per share, while the most pessimistic values it at CN¥7.51. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Shandong Weigao Group Medical Polymer'shistorical trends, as next year's 15% revenue growth is roughly in line with 14% annual revenue growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues fall 20% next year. So although Shandong Weigao Group Medical Polymer is expected to maintain its revenue growth rate, it's forecast to grow slower than 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Shandong Weigao Group Medical Polymer's revenues are expected to perform worse than the wider industry. The consensus price target held steady at CN¥9.50, with the latest estimates not enough to have an impact on their price targets.

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. We have forecasts for Shandong Weigao Group Medical Polymer going out to 2022, and you can see them free on our platform here.

It might also be worth considering whether Shandong Weigao Group Medical Polymer's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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.