It's been a pretty great week for Zhejiang Qianjiang Motorcycle Co., Ltd. (SZSE:000913) shareholders, with its shares surging 20% to CN¥15.80 in the week since its latest annual results. Revenues came in 9.0% below expectations, at CN¥5.1b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.88 being roughly in line with analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Zhejiang Qianjiang Motorcycle's five analysts are now forecasting revenues of CN¥6.30b in 2024. This would be a major 24% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 20% to CN¥1.06. Before this earnings report, the analysts had been forecasting revenues of CN¥6.88b and earnings per share (EPS) of CN¥1.07 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 consensus price target rose 25% to CN¥19.82, with the analysts apparently satisfied with the business performance despite lower revenue forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Zhejiang Qianjiang Motorcycle analyst has a price target of CN¥22.04 per share, while the most pessimistic values it at CN¥17.60. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Zhejiang Qianjiang Motorcycle is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Zhejiang Qianjiang Motorcycle's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 19% per year. Zhejiang Qianjiang Motorcycle is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
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 their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Still, earnings are more important to the intrinsic value of the business. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Zhejiang Qianjiang Motorcycle 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 Zhejiang Qianjiang Motorcycle , and understanding it should be part of your investment process.
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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.