Last week, you might have seen that Bestechnic (Shanghai) Co., Ltd. (SHSE:688608) released its annual result to the market. The early response was not positive, with shares down 4.2% to CN¥106 in the past week. Revenue of CN¥2.2b surpassed estimates by 2.2%, although statutory earnings per share missed badly, coming in 32% below expectations at CN¥1.02 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the seven analysts covering Bestechnic (Shanghai) are now predicting revenues of CN¥2.78b in 2024. If met, this would reflect a huge 28% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 138% to CN¥2.46. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.83b and earnings per share (EPS) of CN¥2.59 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target fell 9.1% to CN¥131, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. There are some variant perceptions on Bestechnic (Shanghai), with the most bullish analyst valuing it at CN¥178 and the most bearish at CN¥97.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. The analysts are definitely expecting Bestechnic (Shanghai)'s growth to accelerate, with the forecast 28% annualised growth to the end of 2024 ranking favourably alongside historical growth of 23% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 23% annually. Bestechnic (Shanghai) 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 Bestechnic (Shanghai). Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Bestechnic (Shanghai)'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 forecasts for Bestechnic (Shanghai) going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Bestechnic (Shanghai) that 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.
