Shareholders might have noticed that Guangdong Xinbao Electrical Appliances Holdings Co., Ltd (SZSE:002705) filed its first-quarter result this time last week. The early response was not positive, with shares down 6.4% to CN¥16.62 in the past week. Guangdong Xinbao Electrical Appliances Holdings beat revenue expectations by 3.3%, at CN¥3.5b. Statutory earnings per share (EPS) came in at CN¥0.21, some 4.1% short of analyst estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Guangdong Xinbao Electrical Appliances Holdings' eleven analysts is for revenues of CN¥16.5b in 2024. This would reflect a satisfactory 7.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 16% to CN¥1.43. Before this earnings report, the analysts had been forecasting revenues of CN¥15.7b and earnings per share (EPS) of CN¥1.35 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
It will come as no surprise to learn that the analysts have increased their price target for Guangdong Xinbao Electrical Appliances Holdings 6.4% to CN¥21.19on the back of these upgrades. 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. Currently, the most bullish analyst values Guangdong Xinbao Electrical Appliances Holdings at CN¥25.00 per share, while the most bearish prices it at CN¥14.40. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Guangdong Xinbao Electrical Appliances Holdings'historical trends, as the 11% annualised revenue growth to the end of 2024 is roughly in line with the 10% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 9.6% per year. So although Guangdong Xinbao Electrical Appliances Holdings is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Guangdong Xinbao Electrical Appliances Holdings following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Guangdong Xinbao Electrical Appliances Holdings will grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 Guangdong Xinbao Electrical Appliances Holdings analysts - going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - Guangdong Xinbao Electrical Appliances Holdings 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.