Henan Shuanghui Investment & Development Co.,Ltd. (SZSE:000895) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results were mixed, with revenues of CN¥14b exceeding expectations, even as earnings per share (EPS) came up short. Statutory earnings were CN¥0.37 per share, -12% below whatthe analysts had forecast. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Henan Shuanghui Investment & DevelopmentLtd from 15 analysts is for revenues of CN¥62.5b in 2024. If met, it would imply a satisfactory 6.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 14% to CN¥1.59. In the lead-up to this report, the analysts had been modelling revenues of CN¥66.5b and earnings per share (EPS) of CN¥1.68 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The analysts made no major changes to their price target of CN¥28.82, suggesting the downgrades are not expected to have a long-term impact on Henan Shuanghui Investment & DevelopmentLtd's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Henan Shuanghui Investment & DevelopmentLtd, with the most bullish analyst valuing it at CN¥33.00 and the most bearish at CN¥19.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. The analysts are definitely expecting Henan Shuanghui Investment & DevelopmentLtd's growth to accelerate, with the forecast 8.6% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 13% annually. So it's clear that despite the acceleration in growth, Henan Shuanghui Investment & DevelopmentLtd is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Henan Shuanghui Investment & DevelopmentLtd. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Henan Shuanghui Investment & DevelopmentLtd going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Henan Shuanghui Investment & DevelopmentLtd .
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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.