Investors in Sinoma International Engineering Co.,Ltd (SHSE:600970) had a good week, as its shares rose 3.7% to close at CN¥11.35 following the release of its yearly results. Sinoma International EngineeringLtd reported CN¥46b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥1.12 beat expectations, being 9.2% higher than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the most recent consensus for Sinoma International EngineeringLtd from 13 analysts is for revenues of CN¥50.8b in 2024. If met, it would imply a solid 11% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 15% to CN¥1.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥51.1b and earnings per share (EPS) of CN¥1.21 in 2024. So the consensus seems to have become somewhat more optimistic on Sinoma International EngineeringLtd's earnings potential following these results.

The consensus price target fell 10% to CN¥14.49, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. 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 Sinoma International EngineeringLtd at CN¥16.29 per share, while the most bearish prices it at CN¥13.30. This is a very narrow spread of estimates, implying either that Sinoma International EngineeringLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Sinoma International EngineeringLtd's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. Compare this to the 107 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. So it's pretty clear that, while Sinoma International EngineeringLtd'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 here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sinoma International EngineeringLtd following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sinoma International EngineeringLtd's future valuation.

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 Sinoma International EngineeringLtd 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 Sinoma International EngineeringLtd , 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.