Investors in Inner Mongolia Yili Industrial Group Co., Ltd. (SHSE:600887) had a good week, as its shares rose 2.5% to close at CN¥28.61 following the release of its first-quarter results. Revenues of CN¥32b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.93 an impressive 55% ahead of estimates. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Inner Mongolia Yili Industrial Group's 25 analysts is for revenues of CN¥132.2b in 2024. This reflects a credible 5.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 5.9% to CN¥1.89 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥137.6b and earnings per share (EPS) of CN¥1.85 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The average price target was steady at CN¥35.82even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Inner Mongolia Yili Industrial Group at CN¥41.00 per share, while the most bearish prices it at CN¥32.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Inner Mongolia Yili Industrial Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.4% growth on an annualised basis. This is compared to a historical growth rate of 9.4% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that Inner Mongolia Yili Industrial Group is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. 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.
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 Inner Mongolia Yili Industrial Group analysts - going out to 2026, and you can see them free on our platform here.
You can also see whether Inner Mongolia Yili Industrial Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.