It's shaping up to be a tough period for Xiamen Xiangyu Co., Ltd. (SHSE:600057), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Unfortunately, Xiamen Xiangyu delivered a serious earnings miss. Revenues of CN¥459b were 13% below expectations, and statutory earnings per share of CN¥0.63 missed estimates by 25%. 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 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 current consensus from Xiamen Xiangyu's four analysts is for revenues of CN¥542.0b in 2024. This would reflect a solid 18% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 49% to CN¥1.03. In the lead-up to this report, the analysts had been modelling revenues of CN¥590.0b and earnings per share (EPS) of CN¥1.15 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
The consensus price target fell 33% to CN¥7.75, with the weaker earnings outlook clearly leading valuation estimates.
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. We can infer from the latest estimates that forecasts expect a continuation of Xiamen Xiangyu'shistorical trends, as the 18% annualised revenue growth to the end of 2024 is roughly in line with the 17% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 10% per year. So although Xiamen Xiangyu is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 Xiamen Xiangyu's future valuation.
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 estimates - from multiple Xiamen Xiangyu analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that Xiamen Xiangyu is showing 3 warning signs in our investment analysis , you should know about...
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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.