China National Building Material Company Limited Just Missed Earnings; Here's What Analysts Are Forecasting Now
Last week, you might have seen that China National Building Material Company Limited (HKG:3323) released its half-yearly result to the market. The early response was not positive, with shares down 3.7% to HK$2.83 in the past week. Revenues fell 2.5% short of expectations, at CN¥81b. Earnings correspondingly dipped, with China National Building Material reporting a statutory loss of CN¥0.11 per share, whereas the analysts had previously modelled a profit in this period. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, China National Building Material's nine analysts are forecasting 2026 revenues to be CN¥176.7b, approximately in line with the last 12 months. Earnings are expected to improve, with China National Building Material forecast to report a statutory profit of CN¥0.02 per share. In the lead-up to this report, the analysts had been modelling revenues of CN¥177.8b and earnings per share (EPS) of CN¥0.093 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
See our latest analysis for China National Building Material
The consensus price target held steady at HK$5.38, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic China National Building Material analyst has a price target of HK$9.18 per share, while the most pessimistic values it at HK$3.22. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that China National Building Material's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.6% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.2% per year. Although China National Building Material's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than 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 China National Building Material. Long-term earnings power is much more important than next year's profits. We have forecasts for China National Building Material going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for China National Building Material (1 is concerning!) that you need to take into consideration.
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