It's been a good week for Zhejiang Juhua Co., Ltd. (SHSE:600160) shareholders, because the company has just released its latest annual results, and the shares gained 3.5% to CN¥23.28. It was not a great result overall. Although revenues beat expectations, hitting CN¥21b, statutory earnings missed analyst forecasts by 12%, coming in at just CN¥0.35 per share. 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.
Taking into account the latest results, the most recent consensus for Zhejiang Juhua from six analysts is for revenues of CN¥24.3b in 2024. If met, it would imply a solid 18% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 177% to CN¥0.97. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥23.6b and earnings per share (EPS) of CN¥0.93 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
It will come as no surprise to learn that the analysts have increased their price target for Zhejiang Juhua 23% to CN¥24.57on the back of these upgrades. 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. Currently, the most bullish analyst values Zhejiang Juhua at CN¥29.70 per share, while the most bearish prices it at CN¥19.00. 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 Zhejiang Juhua shareholders.
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 Juhua's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. Zhejiang Juhua 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zhejiang Juhua's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Zhejiang Juhua will grow in line with the overall 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.
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. At Simply Wall St, we have a full range of analyst estimates for Zhejiang Juhua 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 Juhua , 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.