It's been a good week for Yihai International Holding Ltd. (HKG:1579) shareholders, because the company has just released its latest yearly results, and the shares gained 6.6% to HK$14.82. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥6.1b, statutory earnings beat expectations 2.1%, with Yihai International Holding reporting profits of CN¥0.88 per share. 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.
Taking into account the latest results, the most recent consensus for Yihai International Holding from 18 analysts is for revenues of CN¥6.68b in 2024. If met, it would imply a notable 8.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 6.4% to CN¥0.94. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.93b and earnings per share (EPS) of CN¥0.95 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The consensus price target rose 6.4% to HK$16.77, with the analysts apparently satisfied with the business performance despite lower 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. The most optimistic Yihai International Holding analyst has a price target of HK$21.87 per share, while the most pessimistic values it at HK$12.70. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. We would highlight that Yihai International Holding's revenue growth is expected to slow, with the forecast 8.7% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. Compare this to the 52 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.9% per year. So it's pretty clear that, while Yihai International Holding's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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. At Simply Wall St, we have a full range of analyst estimates for Yihai International Holding going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Yihai International Holding 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.