The annual results for Shanghai Friendess Electronic Technology Corporation Limited (SHSE:688188) were released last week, making it a good time to revisit its performance. Results overall were respectable, with statutory earnings of CN¥4.96 per share roughly in line with what the analysts had forecast. Revenues of CN¥1.4b came in 6.9% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Shanghai Friendess Electronic Technology after the latest results.
After the latest results, the ten analysts covering Shanghai Friendess Electronic Technology are now predicting revenues of CN¥1.95b in 2024. If met, this would reflect a major 39% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 39% to CN¥6.92. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.82b and earnings per share (EPS) of CN¥6.71 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
It will come as no surprise to learn that the analysts have increased their price target for Shanghai Friendess Electronic Technology 8.8% to CN¥325on the back of these upgrades. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Shanghai Friendess Electronic Technology, with the most bullish analyst valuing it at CN¥365 and the most bearish at CN¥299 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shanghai Friendess Electronic Technology's past performance and to peers in the same industry. The analysts are definitely expecting Shanghai Friendess Electronic Technology's growth to accelerate, with the forecast 39% annualised growth to the end of 2024 ranking favourably alongside historical growth of 30% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 19% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shanghai Friendess Electronic Technology to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shanghai Friendess Electronic Technology's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Shanghai Friendess Electronic Technology analysts - going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Shanghai Friendess Electronic Technology , and understanding it should be part of your investment process.
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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.