Milkyway Chemical Supply Chain Service Co.,Ltd Just Beat Revenue Estimates By 18%

Simply Wall St · 10/18 22:29

Shareholders of Milkyway Chemical Supply Chain Service Co.,Ltd (SHSE:603713) will be pleased this week, given that the stock price is up 11% to CN¥58.72 following its latest third-quarter results. It was a mildly positive result, with revenues exceeding expectations at CN¥3.6b, while statutory earnings per share (EPS) of CN¥2.54 were in line with analyst forecasts. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Milkyway Chemical Supply Chain ServiceLtd

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SHSE:603713 Earnings and Revenue Growth October 18th 2024

Following the latest results, Milkyway Chemical Supply Chain ServiceLtd's seven analysts are now forecasting revenues of CN¥13.5b in 2025. This would be a solid 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 29% to CN¥4.13. In the lead-up to this report, the analysts had been modelling revenues of CN¥13.5b and earnings per share (EPS) of CN¥4.12 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CN¥73.74. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Milkyway Chemical Supply Chain ServiceLtd, with the most bullish analyst valuing it at CN¥85.00 and the most bearish at CN¥64.20 per share. This is a very narrow spread of estimates, implying either that Milkyway Chemical Supply Chain ServiceLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Milkyway Chemical Supply Chain ServiceLtd's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2025 being well below the historical 28% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% annually. Factoring in the forecast slowdown in growth, it looks like Milkyway Chemical Supply Chain ServiceLtd is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Milkyway Chemical Supply Chain ServiceLtd. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Milkyway Chemical Supply Chain ServiceLtd going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Milkyway Chemical Supply Chain ServiceLtd (1 is concerning!) that we have uncovered.