It's been a good week for Tingyi (Cayman Islands) Holding Corp. (HKG:322) shareholders, because the company has just released its latest half-year results, and the shares gained 8.5% to HK$10.20. It was a credible result overall, with revenues of CN¥41b and statutory earnings per share of CN¥0.55 both in line with analyst estimates, showing that Tingyi (Cayman Islands) Holding is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, Tingyi (Cayman Islands) Holding's 23 analysts currently expect revenues in 2024 to be CN¥82.0b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 5.4% to CN¥0.63. In the lead-up to this report, the analysts had been modelling revenues of CN¥83.8b and earnings per share (EPS) of CN¥0.62 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.
There's been no real change to the average price target of HK$11.57, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Tingyi (Cayman Islands) Holding, with the most bullish analyst valuing it at HK$13.04 and the most bearish at HK$8.59 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Tingyi (Cayman Islands) Holding shareholders.
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. It's pretty clear that there is an expectation that Tingyi (Cayman Islands) Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.1% growth on an annualised basis. This is compared to a historical growth rate of 6.8% 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 5.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Tingyi (Cayman Islands) Holding 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 Tingyi (Cayman Islands) Holding following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at HK$11.57, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Tingyi (Cayman Islands) Holding. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Tingyi (Cayman Islands) Holding going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Tingyi (Cayman Islands) Holding , and understanding this should be part of your investment process.
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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.