Shareholders might have noticed that National Silicon Industry Group Co.,Ltd. (SHSE:688126) filed its second-quarter result this time last week. The early response was not positive, with shares down 2.2% to CN¥14.69 in the past week. It was a pretty negative result overall, with revenues of CN¥845m missing analyst predictions by 3.0%. Worse, the business reported a statutory loss of CN¥0.069 per share, a substantial decline on analyst expectations of a profit. 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. 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 consensus forecast from National Silicon Industry GroupLtd's six analysts is for revenues of CN¥3.48b in 2024. This reflects a notable 9.4% improvement in revenue compared to the last 12 months. Per-share losses are expected to creep up to CN¥0.13, on a statutory basis. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.80b and earnings per share (EPS) of CN¥0.079 in 2024. The analysts have made an abrupt about-face on National Silicon Industry GroupLtd, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.
There was no major change to the consensus price target of CN¥14.18, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. The most optimistic National Silicon Industry GroupLtd analyst has a price target of CN¥22.70 per share, while the most pessimistic values it at CN¥3.70. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that National Silicon Industry GroupLtd's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. National Silicon Industry GroupLtd is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that the analysts are expecting National Silicon Industry GroupLtd to become unprofitable next year. 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. 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 estimates - from multiple National Silicon Industry GroupLtd analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of National Silicon Industry GroupLtd's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.