It's been a good week for Zhengzhou Qianweiyangchu Food Co., Ltd. (SZSE:001215) shareholders, because the company has just released its latest second-quarter results, and the shares gained 2.8% to CN¥23.93. Revenues came in 5.0% below expectations, at CN¥429m. Statutory earnings per share were relatively better off, with a per-share profit of CN¥1.56 being roughly in line with analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 most recent consensus for Zhengzhou Qianweiyangchu Food from eleven analysts is for revenues of CN¥2.04b in 2024. If met, it would imply a modest 5.2% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 7.0% to CN¥1.49. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.22b and earnings per share (EPS) of CN¥1.71 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
The consensus price target fell 15% to CN¥36.46, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on Zhengzhou Qianweiyangchu Food, with the most bullish analyst valuing it at CN¥54.49 and the most bearish at CN¥28.60 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. It's pretty clear that there is an expectation that Zhengzhou Qianweiyangchu Food's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% annually. Factoring in the forecast slowdown in growth, it looks like Zhengzhou Qianweiyangchu Food is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zhengzhou Qianweiyangchu Food. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Zhengzhou Qianweiyangchu Food'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. At Simply Wall St, we have a full range of analyst estimates for Zhengzhou Qianweiyangchu Food going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Zhengzhou Qianweiyangchu Food .
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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.
