It's been a good week for China Jinmao Holdings Group Limited (HKG:817) shareholders, because the company has just released its latest full-year results, and the shares gained 6.0% to HK$5.09. Revenues were CN¥43b, 14% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of CN¥0.54 being in line with what the analysts anticipated. 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.

See our latest analysis for China Jinmao Holdings Group

Following the latest results, China Jinmao Holdings Group's 18 analysts are now forecasting revenues of CN¥61.0b in 2020. This would be a sizeable 41% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 17% to CN¥0.65. In the lead-up to this report, the analysts had been modelling revenues of CN¥69.6b and earnings per share (EPS) of CN¥0.71 in 2020. Indeed, we can see that sentiment has declined measurably after results came out, with a real cut to revenue estimates and a small dip in EPS estimates to boot.

Despite the cuts to forecast earnings, there was no real change to the HK$6.44 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic China Jinmao Holdings Group analyst has a price target of HK$8.50 per share, while the most pessimistic values it at HK$4.30. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Jinmao Holdings Group's past performance and to peers in the same industry. The analysts are definitely expecting China Jinmao Holdings Group's growth to accelerate, with the forecast 41% growth ranking favourably alongside historical growth of 16% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that China Jinmao Holdings Group is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Jinmao Holdings Group. They also downgraded their revenue estimates, although industry data suggests that China Jinmao Holdings Group's revenues are expected to grow faster than the wider industry. The consensus price target held steady at CN¥6.44, with the latest estimates not enough to have an impact on their price targets.

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 China Jinmao Holdings Group analysts - going out to 2022, and you can see them free on our platform here.

Even so, be aware that China Jinmao Holdings Group is showing 3 warning signs in our investment analysis , you should know about...

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