Hubei Dinglong CO.,Ltd. (SZSE:300054) just released its latest full-year report and things are not looking great. Results look to have been somewhat negative - revenue fell 3.3% short of analyst estimates at CN¥2.7b, and statutory earnings of CN¥0.24 per share missed forecasts by 4.7%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

After the latest results, the eight analysts covering Hubei DinglongLtd are now predicting revenues of CN¥3.14b in 2024. If met, this would reflect a meaningful 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 86% to CN¥0.44. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.27b and earnings per share (EPS) of CN¥0.51 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

What's most unexpected is that the consensus price target rose 12% to CN¥25.50, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Hubei DinglongLtd, with the most bullish analyst valuing it at CN¥27.00 and the most bearish at CN¥24.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 18% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% annually. It's clear that while Hubei DinglongLtd's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hubei DinglongLtd. 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. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Hubei DinglongLtd analysts - 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 Hubei DinglongLtd , and understanding it should be part of your investment process.

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