Investors in Kingfa Sci. & Tech. Co., Ltd. (SHSE:600143) had a good week, as its shares rose 5.6% to close at CN¥10.67 following the release of its annual results. Revenues of CN¥61b beat forecasts by 15%, although statutory earnings per share disappointed slightly, coming in 3.5% below expectations at CN¥0.31. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, Kingfa Sci. & Tech's three analysts are now forecasting revenues of CN¥65.2b in 2025. This would be a modest 7.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 44% to CN¥0.46. In the lead-up to this report, the analysts had been modelling revenues of CN¥58.6b and earnings per share (EPS) of CN¥0.91 in 2025. Although revenues are expected to increase meaningfully, the analysts have acknowledged the cost of growth, given the large cut to EPS estimates following the latest report.

The consensus price target was unchanged at CN¥11.94, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Kingfa Sci. & Tech at CN¥12.00 per share, while the most bearish prices it at CN¥11.88. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company 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 Kingfa Sci. & Tech's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.8% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% annually. Factoring in the forecast slowdown in growth, it seems obvious that Kingfa Sci. & Tech is also expected to grow slower than other industry participants.

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 upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at CN¥11.94, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kingfa Sci. & Tech going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Kingfa Sci. & Tech (1 is a bit unpleasant!) that you need to take into consideration.

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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.