Shanghai Awinic Technology Co.,Ltd. (SHSE:688798) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. In addition to beating expectations by 14% with revenues of CN¥776m, Shanghai Awinic TechnologyLtd delivered a surprise (statutory) profit of CN¥0.15 per share, a sweet improvement compared to the losses that the analysts forecast. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, Shanghai Awinic TechnologyLtd's eight analysts currently expect revenues in 2024 to be CN¥3.12b, approximately in line with the last 12 months. Statutory earnings per share are forecast to shrink 9.0% to CN¥0.83 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.09b and earnings per share (EPS) of CN¥0.72 in 2024. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The average the analysts price target fell 11% to CN¥78.31, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. 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. The most optimistic Shanghai Awinic TechnologyLtd analyst has a price target of CN¥100.00 per share, while the most pessimistic values it at CN¥55.38. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Shanghai Awinic TechnologyLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.6% 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. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Shanghai Awinic TechnologyLtd.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shanghai Awinic TechnologyLtd's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shanghai Awinic TechnologyLtd'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 Shanghai Awinic TechnologyLtd going out to 2026, and you can see them free on our platform here.
We also provide an overview of the Shanghai Awinic TechnologyLtd Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.