As you might know, Zhejiang Jingsheng Mechanical & Electrical Co., Ltd. (SZSE:300316) last week released its latest full-year, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 2.7% short of analyst estimates at CN¥18b, and statutory earnings of CN¥3.49 per share missed forecasts by 4.4%. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Zhejiang Jingsheng Mechanical & Electrical from nine analysts is for revenues of CN¥22.3b in 2024. If met, it would imply a substantial 24% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 21% to CN¥4.21. In the lead-up to this report, the analysts had been modelling revenues of CN¥22.3b and earnings per share (EPS) of CN¥4.35 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
The average price target fell 5.2% to CN¥42.58, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 Zhejiang Jingsheng Mechanical & Electrical, with the most bullish analyst valuing it at CN¥54.00 and the most bearish at CN¥33.50 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's pretty clear that there is an expectation that Zhejiang Jingsheng Mechanical & Electrical's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 42% over the past five years. Compare this to the 213 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 22% per year. Factoring in the forecast slowdown in growth, it looks like Zhejiang Jingsheng Mechanical & Electrical is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zhejiang Jingsheng Mechanical & Electrical's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Zhejiang Jingsheng Mechanical & Electrical going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Zhejiang Jingsheng Mechanical & Electrical (1 is significant) you should be aware of.
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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.