It's been a good week for Shanghai BOCHU Electronic Technology Corporation Limited. (SHSE:688188) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.0% to CN¥153. Statutory earnings per share fell badly short of expectations, coming in at CN¥1.06, some 26% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CN¥503m. 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'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 Shanghai BOCHU Electronic Technology from ten analysts is for revenues of CN¥1.90b in 2024. If met, it would imply a solid 17% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 18% to CN¥4.92. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.96b and earnings per share (EPS) of CN¥4.86 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
It will come as no surprise then, that the consensus price target fell 8.8% to CN¥223following these changes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Shanghai BOCHU Electronic Technology analyst has a price target of CN¥271 per share, while the most pessimistic values it at CN¥196. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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 Shanghai BOCHU Electronic Technology's rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 29% 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 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Shanghai BOCHU Electronic Technology 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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. At Simply Wall St, we have a full range of analyst estimates for Shanghai BOCHU Electronic Technology going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Shanghai BOCHU Electronic 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.