It's shaping up to be a tough period for Fujian Longking Co., Ltd. (SHSE:600388), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥11b missed by 13%, and statutory earnings per share of CN¥0.45 fell short of forecasts by 50%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Fujian Longking's three analysts is for revenues of CN¥13.5b in 2024. This would reflect a huge 23% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 123% to CN¥1.05. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥17.7b and earnings per share (EPS) of CN¥1.35 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a large cut to revenue estimates and a large cut to earnings per share numbers as well.
The consensus price target fell 7.2% to CN¥19.43, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Fujian Longking at CN¥23.00 per share, while the most bearish prices it at CN¥15.86. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Fujian Longking's rate of growth is expected to accelerate meaningfully, with the forecast 23% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. Fujian Longking is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Fujian Longking. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Fujian Longking going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 3 warning signs we've spotted with Fujian Longking .
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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.