Qi An Xin Technology Group Inc. (SHSE:688561) shareholders are probably feeling a little disappointed, since its shares fell 7.5% to CN¥30.10 in the week after its latest second-quarter results. Revenues were CN¥1.1b, 27% shy of what the analysts were expecting, although statutory earnings of CN¥0.10 per share were roughly in line with what was forecast. 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.
Following the latest results, Qi An Xin Technology Group's eight analysts are now forecasting revenues of CN¥6.35b in 2024. This would be a decent 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 72% to CN¥0.30. Before this earnings report, the analysts had been forecasting revenues of CN¥6.43b and earnings per share (EPS) of CN¥0.30 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target rose 5.6% to CN¥27.96despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Qi An Xin Technology Group's earnings by assigning a price premium. 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 Qi An Xin Technology Group, with the most bullish analyst valuing it at CN¥41.00 and the most bearish at CN¥20.00 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Qi An Xin Technology Group's rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% 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 20% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Qi An Xin Technology Group is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Qi An Xin Technology Group analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Qi An Xin Technology Group that you need to take into consideration.
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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.
