Hexing Electrical Co.,Ltd. (SHSE:603556) just released its annual report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.4% to hit CN¥4.2b. Hexing ElectricalLtd reported statutory earnings per share (EPS) CN¥2.02, which was a notable 19% above what the analysts had forecast. 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 five analysts covering Hexing ElectricalLtd are now predicting revenues of CN¥5.19b in 2024. If met, this would reflect a huge 24% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 14% to CN¥2.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥4.86b and earnings per share (EPS) of CN¥2.07 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 18% to CN¥40.57per share. 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 Hexing ElectricalLtd, with the most bullish analyst valuing it at CN¥47.00 and the most bearish at CN¥32.26 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hexing ElectricalLtd shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Hexing ElectricalLtd's growth to accelerate, with the forecast 24% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Hexing ElectricalLtd is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hexing ElectricalLtd's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Hexing ElectricalLtd going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Hexing ElectricalLtd that 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.