Shanghai Ganglian E-Commerce Holdings Co., Ltd. exceeds profit expectations: what analysts predict for the future

Shanghai Ganglian E-Commerce Holdings Co., Ltd. Exceeds Profit Expectations: What Analysts Predict for the Future

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Shareholders of Shanghai Ganglian E-Commerce Holdings Co., Ltd. (SZSE:300226) might be somewhat disappointed as the company's shares fell 6,0% to CN¥20,70 in the week following its latest annual results. Although the result was generally positive - with revenues of CN¥86b in line with analysts' forecasts, Shanghai Ganglian E-Commerce Holdings surprised by delivering statutory earnings per share of CN¥0,74, slightly above expectations. This performance raises questions about the company's future prospects and merits further analysis.

What are the expectations after the results?

Following the release of the latest results, the consensus of the five analysts covering Shanghai Ganglian E-Commerce Holdings is forecasting revenues of CN¥96.7b in 2024, marking a significant improvement of 12% from the last twelve months. Statutory earnings per share are expected to rise 19% to CN¥0.89. However, it is important to note that prior to these recent results, analysts had anticipated revenues of CN¥95.8b and EPS of CN¥0.91 for 2024. So there appears to have been a slight decline in overall sentiment following this announcement , although there was no major change in revenue estimates.

Analysts' vision remains stable

Despite the downward revision to earnings per share forecasts, the consensus target price remains unchanged at CN¥35.64. This suggests that analysts still believe in the company's ability to value itself over the long term, despite short-term adjustments to their earnings estimates. Perceptions vary among analysts, with the most optimistic valuing the stock at CN¥41.20 and the most pessimistic at CN¥30.08 per share. This difference of opinion indicates varied perspectives on the future performance of the company.

Comparison with industry

A notable aspect of the forecast is that Shanghai Ganglian E-Commerce Holdings is expected to grow faster in the future than it has in the past, with expected revenue showing annualized growth of 12% through the end 2024. If achieved, this would be a much better result than the 8,1% annual decline seen over the past five years. Compared to analyst estimates for the overall industry, which suggest that industry revenue is expected to grow 13% annually, Shanghai Ganglian E-Commerce Holdings is expected to grow at a similar rate to the industry plus wide.

Conclusion

Ultimately, although analysts have revised their earnings per share estimates slightly downward, revenue forecasts remain stable, and the company is still expected to grow in line with the industry. These elements suggest that the long-term outlook for Shanghai Ganglian E-Commerce Holdings remains positive. For those looking to invest, it might be wise to consider these factors along with other fundamental analysis to make an informed decision.

Credits

Sources used in this article:

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Shanghai Ganglian E-Commerce Holdings Co., Ltd. Exceeds Profit Expectations: What Analysts Predict for the Future

Virginie Majaux

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