Last week, you might have seen that Bestechnic (Shanghai) Co., Ltd. (SHSE:688608) released its yearly result to the market. The early response was not positive, with shares down 8.5% to CN¥113 in the past week. Results overall were not great, with earnings of CN¥1.03 per share falling drastically short of analyst expectations. Meanwhile revenues hit CN¥2.2b and were slightly better than forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the eight analysts covering Bestechnic (Shanghai) are now predicting revenues of CN¥2.87b in 2024. If met, this would reflect a major 32% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 151% to CN¥2.59. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.72b and earnings per share (EPS) of CN¥2.82 in 2024. So it's pretty clear consensus is mixed on Bestechnic (Shanghai) after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.
The consensus price target was unchanged at CN¥148, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Bestechnic (Shanghai), with the most bullish analyst valuing it at CN¥178 and the most bearish at CN¥101 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Bestechnic (Shanghai) shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bestechnic (Shanghai)'s past performance and to peers in the same industry. It's clear from the latest estimates that Bestechnic (Shanghai)'s rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 23% 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 24% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Bestechnic (Shanghai) to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at CN¥148, with the latest estimates not enough to have an impact on their price targets.
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 Bestechnic (Shanghai) analysts - going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Bestechnic (Shanghai) you should be aware of.
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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.
