Last week, you might have seen that Shenzhen Kedali Industry Co., Ltd. (SZSE:002850) released its second-quarter result to the market. The early response was not positive, with shares down 3.9% to CN¥70.22 in the past week. It was a workmanlike result, with revenues of CN¥2.9b coming in 6.5% ahead of expectations, and statutory earnings per share of CN¥1.26, in line with analyst appraisals. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Shenzhen Kedali Industry from 13 analysts is for revenues of CN¥12.6b in 2024. If met, it would imply a solid 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 5.6% to CN¥5.23. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥12.8b and earnings per share (EPS) of CN¥5.23 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of CN¥108, showing that the business is executing well and in line with expectations. 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 Shenzhen Kedali Industry at CN¥124 per share, while the most bearish prices it at CN¥92.03. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 Shenzhen Kedali Industry's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 30% growth on an annualised basis. This is compared to a historical growth rate of 39% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. Even after the forecast slowdown in growth, it seems obvious that Shenzhen Kedali Industry is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CN¥108, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Shenzhen Kedali Industry going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Shenzhen Kedali Industry has 1 warning sign we think you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
