Shareholders of Anhui Jinhe Industrial Co.,Ltd. (SZSE:002597) will be pleased this week, given that the stock price is up 10% to CN¥24.61 following its latest first-quarter results. Revenues were CN¥1.2b, 28% shy of what the analysts were expecting, although statutory earnings of CN¥1.27 per share were roughly in line with what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the most recent consensus for Anhui Jinhe IndustrialLtd from nine analysts is for revenues of CN¥6.27b in 2024. If met, it would imply a sizeable 22% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 35% to CN¥1.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥5.33b and earnings per share (EPS) of CN¥1.41 in 2024. There's clearly been a surge in bullishness around the company's revenue pipeline, even if there's no real change in earnings per share forecasts.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of CN¥26.59, implying that the uplift in revenue is not expected to greatly contribute to Anhui Jinhe IndustrialLtd's valuation in the near term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Anhui Jinhe IndustrialLtd at CN¥28.00 per share, while the most bearish prices it at CN¥25.50. This is a very narrow spread of estimates, implying either that Anhui Jinhe IndustrialLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Anhui Jinhe IndustrialLtd's growth to accelerate, with the forecast 30% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Anhui Jinhe IndustrialLtd to grow faster than the wider industry.

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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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 Anhui Jinhe IndustrialLtd. Long-term earnings power is much more important than next year's profits. We have forecasts for Anhui Jinhe IndustrialLtd going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Anhui Jinhe IndustrialLtd has 2 warning signs we think you should be aware of.

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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.