MeiHua Holdings Group Co.,Ltd (SHSE:600873) just released its latest full-year report and things are not looking great. MeiHua Holdings GroupLtd missed analyst forecasts, with revenues of CN¥28b and statutory earnings per share (EPS) of CN¥1.06, falling short by 2.8% and 5.9% respectively. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on MeiHua Holdings GroupLtd after the latest results.
Taking into account the latest results, the current consensus from MeiHua Holdings GroupLtd's three analysts is for revenues of CN¥30.1b in 2024. This would reflect a decent 8.4% increase on its revenue over the past 12 months. Statutory per share are forecast to be CN¥1.11, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CN¥31.4b and earnings per share (EPS) of CN¥1.28 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
Despite the cuts to forecast earnings, there was no real change to the CN¥13.78 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 MeiHua Holdings GroupLtd analyst has a price target of CN¥14.56 per share, while the most pessimistic values it at CN¥13.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that MeiHua Holdings GroupLtd's revenue growth is expected to slow, with the forecast 8.4% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than MeiHua Holdings GroupLtd.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for MeiHua Holdings GroupLtd. 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. 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. At Simply Wall St, we have a full range of analyst estimates for MeiHua Holdings GroupLtd going out to 2026, 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 MeiHua Holdings GroupLtd 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.