As you might know, Hangzhou Robam Appliances Co., Ltd. (SZSE:002508) last week released its latest quarterly, and things did not turn out so great for shareholders. Hangzhou Robam Appliances missed analyst forecasts, with revenues of CN¥2.2b and statutory earnings per share (EPS) of CN¥0.42, falling short by 6.1% and 2.3% respectively. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Hangzhou Robam Appliances' 21 analysts are now forecasting revenues of CN¥12.1b in 2024. This would be a satisfactory 7.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 9.5% to CN¥2.02. In the lead-up to this report, the analysts had been modelling revenues of CN¥12.4b and earnings per share (EPS) of CN¥2.20 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥28.56, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic Hangzhou Robam Appliances analyst has a price target of CN¥38.00 per share, while the most pessimistic values it at CN¥23.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hangzhou Robam Appliances' past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 10% growth on an annualised basis. That is in line with its 9.6% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 9.6% per year. It's clear that while Hangzhou Robam Appliances' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 Hangzhou Robam Appliances. Long-term earnings power is much more important than next year's profits. We have forecasts for Hangzhou Robam Appliances going out to 2026, and you can see them free on our platform here.
Even so, be aware that Hangzhou Robam Appliances is showing 1 warning sign in our investment analysis , you should know about...
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