As you might know, Zhejiang Huace Film & TV Co., Ltd. (SZSE:300133) recently reported its first-quarter numbers. Revenues were CN¥177m, 59% shy of what the analysts were expecting, although statutory earnings of CN¥0.20 per share were roughly in line with what was 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the seven analysts covering Zhejiang Huace Film & TV are now predicting revenues of CN¥3.93b in 2024. If met, this would reflect a substantial 166% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 127% to CN¥0.32. Before this earnings report, the analysts had been forecasting revenues of CN¥3.98b and earnings per share (EPS) of CN¥0.33 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target fell 18% to CN¥5.73, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Zhejiang Huace Film & TV at CN¥6.70 per share, while the most bearish prices it at CN¥5.20. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhejiang Huace Film & TV's past performance and to peers in the same industry. For example, we noticed that Zhejiang Huace Film & TV's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 268% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 13% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 16% per year. So it looks like Zhejiang Huace Film & TV is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zhejiang Huace Film & TV's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Zhejiang Huace Film & TV going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - Zhejiang Huace Film & TV has 1 warning sign we think 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.