Last week, you might have seen that Xinfengming Group Co., Ltd. (SHSE:603225) released its yearly result to the market. The early response was not positive, with shares down 2.4% to CN¥13.93 in the past week. Results overall were respectable, with statutory earnings of CN¥0.72 per share roughly in line with what the analysts had forecast. Revenues of CN¥61b came in 2.7% ahead of analyst predictions. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Xinfengming Group from nine analysts is for revenues of CN¥65.9b in 2024. If met, it would imply a satisfactory 7.2% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 66% to CN¥1.19. Before this earnings report, the analysts had been forecasting revenues of CN¥64.9b and earnings per share (EPS) of CN¥1.22 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.
The consensus price target held steady at CN¥14.00, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Xinfengming Group, with the most bullish analyst valuing it at CN¥15.40 and the most bearish at CN¥12.60 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Xinfengming Group is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Xinfengming Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Xinfengming Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.2% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. Factoring in the forecast slowdown in growth, it seems obvious that Xinfengming Group is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Xinfengming Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Xinfengming Group's revenue is expected to perform worse than the wider industry. The consensus price target held steady at CN¥14.00, 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. We have estimates - from multiple Xinfengming Group analysts - going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Xinfengming Group that 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.