Longhua Technology Group Co.,Ltd. (SZSE:300263) just released its latest quarterly report and things are not looking great. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥580m) coming in 30% below what they had expected. Statutory earnings per share of CN¥0.06 fell 24% short. 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.

After the latest results, the dual analysts covering Longhua Technology GroupLtd are now predicting revenues of CN¥2.95b in 2024. If met, this would reflect a decent 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 98% to CN¥0.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.04b and earnings per share (EPS) of CN¥0.29 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The analysts made no major changes to their price target of CN¥7.98, suggesting the downgrades are not expected to have a long-term impact on Longhua Technology GroupLtd's valuation.

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 clear from the latest estimates that Longhua Technology GroupLtd's rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.1% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Longhua Technology GroupLtd to grow faster than 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 Longhua Technology GroupLtd. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Longhua Technology GroupLtd going out as far as 2026, and you can see them free on our platform here.

You can also view our analysis of Longhua Technology GroupLtd's balance sheet, and whether we think Longhua Technology GroupLtd is carrying too much debt, for free on our platform 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.