As you might know, Inner Mongolia Yili Industrial Group Co., Ltd. (SHSE:600887) last week released its latest half-year, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with CN¥60b revenue coming in 5.7% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.26 missed the mark badly, arriving some 22% below what was expected. 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.
Following last week's earnings report, Inner Mongolia Yili Industrial Group's 26 analysts are forecasting 2024 revenues to be CN¥121.7b, approximately in line with the last 12 months. Statutory per share are forecast to be CN¥1.85, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥128.4b and earnings per share (EPS) of CN¥1.99 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the CN¥31.81 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Inner Mongolia Yili Industrial Group analyst has a price target of CN¥36.00 per share, while the most pessimistic values it at CN¥27.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Inner Mongolia Yili Industrial Group's past performance and to peers in the same industry. We would highlight that Inner Mongolia Yili Industrial Group's revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2024 being well below the historical 8.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Inner Mongolia Yili Industrial Group is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Inner Mongolia Yili Industrial Group. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CN¥31.81, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Inner Mongolia Yili Industrial Group going out to 2026, and you can see them free on our platform here..
It might also be worth considering whether Inner Mongolia Yili Industrial Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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.
