Huizhou Desay SV Automotive Co., Ltd. (SZSE:002920) defied analyst predictions to release its yearly results, which were ahead of market expectations. Results were good overall, with revenues beating analyst predictions by 6.0% to hit CN¥22b. Statutory earnings per share (EPS) came in at CN¥2.80, some 5.0% above whatthe analysts had 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. 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 current consensus from Huizhou Desay SV Automotive's 19 analysts is for revenues of CN¥27.6b in 2024. This would reflect a sizeable 26% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 30% to CN¥3.62. In the lead-up to this report, the analysts had been modelling revenues of CN¥27.0b and earnings per share (EPS) of CN¥3.69 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.
It may not be a surprise to see thatthe analysts have reconfirmed their price target of CN¥138, implying that the uplift in revenue is not expected to greatly contribute to Huizhou Desay SV Automotive's valuation in the near term. 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 Huizhou Desay SV Automotive at CN¥175 per share, while the most bearish prices it at CN¥98.80. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Huizhou Desay SV Automotive shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 26% growth on an annualised basis. That is in line with its 32% 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 15% per year. So although Huizhou Desay SV Automotive is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at CN¥138, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Huizhou Desay SV Automotive going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Huizhou Desay SV Automotive (1 is a bit concerning!) that you need to take into consideration.
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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.