The latest analyst coverage could presage a bad day for Guangdong HEC Technology Holding Co., Ltd (SHSE:600673), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from Guangdong HEC Technology Holding's sole analyst is for revenues of CN¥13b in 2024 which - if met - would reflect a huge 23% increase on its sales over the past 12 months. Prior to the latest estimates, the analyst was forecasting revenues of CN¥17b in 2024. The consensus view seems to have become more pessimistic on Guangdong HEC Technology Holding, noting the sizeable cut to revenue estimates in this update.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Guangdong HEC Technology Holding's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 23% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 10% per year. Not only are Guangdong HEC Technology Holding's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The clear low-light was that the analyst slashing their revenue forecasts for Guangdong HEC Technology Holding this year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Guangdong HEC Technology Holding going forwards.

Worse yet, our risk analysis suggests that Guangdong HEC Technology Holding may find it hard to maintain its dividend following these downgrades. You can learn more, and discover the 1 possible risk we've identified, for free on our platform here.

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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.