Earnings Update: Here's Why Analysts Just Lifted Their Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (HKG:6990) Price Target To HK$612
Last week saw the newest interim earnings release from Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (HKG:6990), an important milestone in the company's journey to build a stronger business. It was a weak result overall, with Sichuan Kelun-Biotech Biopharmaceutical reporting CN¥978m in revenues, which was 27% less than what the analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Sichuan Kelun-Biotech Biopharmaceutical from 19 analysts is for revenues of CN¥2.52b in 2026. If met, it would imply a substantial 21% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to plummet 99% to CN¥0.0092 in the same period. Before this latest report, the consensus had been expecting revenues of CN¥2.73b and CN¥0.37 per share in losses. While we note the small dip in to the revenue outlook, the analysts are now also predicting for the business to become profitable next year - sooner than previously forecast - which looks like a pretty clear lift in expectations.
View our latest analysis for Sichuan Kelun-Biotech Biopharmaceutical
The average price target increased 7.9% to HK$612, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Sichuan Kelun-Biotech Biopharmaceutical, with the most bullish analyst valuing it at HK$765 and the most bearish at HK$520 per share. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sichuan Kelun-Biotech Biopharmaceutical's past performance and to peers in the same industry. It's clear from the latest estimates that Sichuan Kelun-Biotech Biopharmaceutical's rate of growth is expected to accelerate meaningfully, with the forecast 46% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 9.3% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sichuan Kelun-Biotech Biopharmaceutical is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts now expect Sichuan Kelun-Biotech Biopharmaceutical to become profitable next year, compared to previous expectations that it would report a loss. They also downgraded Sichuan Kelun-Biotech Biopharmaceutical's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Sichuan Kelun-Biotech Biopharmaceutical. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sichuan Kelun-Biotech Biopharmaceutical analysts - going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - Sichuan Kelun-Biotech Biopharmaceutical has 1 warning sign we think you should be aware of.
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