As you might know, Zhejiang Hechuan Technology Co., Ltd. (SHSE:688320) last week released its latest full-year, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with CN¥1.1b revenue coming in 6.4% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.35 missed the mark badly, arriving some 42% 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Zhejiang Hechuan Technology from twin analysts is for revenues of CN¥1.27b in 2024. If met, it would imply a decent 13% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 70% to CN¥0.60. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.60b and earnings per share (EPS) of CN¥0.90 in 2024. Indeed, we can see that the analysts are a lot more bearish about Zhejiang Hechuan Technology's prospects following the latest results, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.5% to CN¥34.60.
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. We would highlight that Zhejiang Hechuan Technology's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2024 being well below the historical 23% 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 19% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Zhejiang Hechuan Technology.
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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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. We have analyst estimates for Zhejiang Hechuan Technology going out as far as 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Zhejiang Hechuan Technology that 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.