Joyoung Co.,Ltd (SZSE:002242) just released its latest full-year report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥9.6b, statutory earnings missed forecasts by an incredible 29%, coming in at just CN¥0.52 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the 15 analysts covering JoyoungLtd are now predicting revenues of CN¥10.4b in 2024. If met, this would reflect a notable 8.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 61% to CN¥0.82. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥11.4b and earnings per share (EPS) of CN¥0.86 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The consensus price target fell 5.8% to CN¥13.38, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on JoyoungLtd, with the most bullish analyst valuing it at CN¥17.70 and the most bearish at CN¥9.70 per share. 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.
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 analysts are definitely expecting JoyoungLtd's growth to accelerate, with the forecast 8.6% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.3% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.9% per year. JoyoungLtd is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for JoyoungLtd. 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on JoyoungLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple JoyoungLtd analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of JoyoungLtd's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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