Investors in Zhejiang Weixing New Building Materials Co., Ltd. (SZSE:002372) had a good week, as its shares rose 4.2% to close at CN¥15.69 following the release of its full-year results. Zhejiang Weixing New Building Materials reported CN¥6.4b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥0.90 beat expectations, being 2.2% higher than what the analysts expected. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Zhejiang Weixing New Building Materials' 18 analysts is for revenues of CN¥7.01b in 2024. This reflects a notable 9.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 7.5% to CN¥0.97. Before this earnings report, the analysts had been forecasting revenues of CN¥7.20b and earnings per share (EPS) of CN¥0.96 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
The consensus has made no major changes to the price target of CN¥20.58, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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. There are some variant perceptions on Zhejiang Weixing New Building Materials, with the most bullish analyst valuing it at CN¥23.80 and the most bearish at CN¥18.60 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Zhejiang Weixing New Building Materials is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 9.2% growth on an annualised basis. That is in line with its 9.8% annual growth 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 revenues grow 16% per year. So it's pretty clear that Zhejiang Weixing New Building Materials is expected to grow slower than similar companies in the same industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zhejiang Weixing New Building Materials' earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Zhejiang Weixing New Building Materials going out to 2025, and you can see them free on our platform here.
We also provide an overview of the Zhejiang Weixing New Building Materials Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.