It's shaping up to be a tough period for Qi An Xin Technology Group Inc. (SHSE:688561), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. Unfortunately, Qi An Xin Technology Group delivered a serious earnings miss. Revenues of CN¥6.4b were 13% below expectations, and statutory earnings per share of CN¥0.10 missed estimates by 76%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Qi An Xin Technology Group after the latest results.
Taking into account the latest results, the consensus forecast from Qi An Xin Technology Group's ten analysts is for revenues of CN¥7.34b in 2024. This reflects a notable 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 752% to CN¥0.89. In the lead-up to this report, the analysts had been modelling revenues of CN¥9.18b and earnings per share (EPS) of CN¥0.86 in 2024. Indeed we can see that the consensus opinion has undergone some fundamental changes after the latest results, with a large cut to revenues at the same time as boosting EPS forecasts.
The analysts have cut their price target 9.7% to CN¥50.57per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. 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 Qi An Xin Technology Group, with the most bullish analyst valuing it at CN¥68.00 and the most bearish at CN¥31.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Qi An Xin Technology Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 22% annually. Factoring in the forecast slowdown in growth, it seems obvious that Qi An Xin Technology Group is also expected to grow slower than other industry participants.
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 Qi An Xin Technology Group following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Qi An Xin Technology Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Qi An Xin Technology Group analysts - going out to 2026, and you can see them free on our platform here.
It might also be worth considering whether Qi An Xin Technology Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.
