Last week saw the newest full-year earnings release from Shenzhen Kedali Industry Co., Ltd. (SZSE:002850), an important milestone in the company's journey to build a stronger business. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at CN¥11b, statutory earnings beat expectations by a notable 11%, coming in at CN¥4.79 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Shenzhen Kedali Industry after the latest results.
After the latest results, the ten analysts covering Shenzhen Kedali Industry are now predicting revenues of CN¥13.0b in 2024. If met, this would reflect a major 24% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 20% to CN¥5.32. Before this earnings report, the analysts had been forecasting revenues of CN¥13.8b and earnings per share (EPS) of CN¥5.37 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The analysts have also increased their price target 5.4% to CN¥108, clearly signalling that lower revenue forecasts next year are not expected to have a material impact on Shenzhen Kedali Industry's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Shenzhen Kedali Industry analyst has a price target of CN¥120 per share, while the most pessimistic values it at CN¥97.30. This is a very narrow spread of estimates, implying either that Shenzhen Kedali Industry is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. We would highlight that Shenzhen Kedali Industry's revenue growth is expected to slow, with the forecast 24% annualised growth rate until the end of 2024 being well below the historical 40% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% annually. Even after the forecast slowdown in growth, it seems obvious that Shenzhen Kedali Industry is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded Shenzhen Kedali Industry's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 forecasts for Shenzhen Kedali Industry going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Shenzhen Kedali Industry (including 1 which shouldn't be ignored) .
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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.