Zhejiang NHU Company Ltd. (SZSE:002001) just released its latest second-quarter results and things are looking bullish. Zhejiang NHU delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting CN¥5.3b-15% above indicated-andCN¥0.43-32% above forecasts- respectively 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Zhejiang NHU's ten analysts is for revenues of CN¥19.4b in 2024. This reflects a solid 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 34% to CN¥1.49. Before this earnings report, the analysts had been forecasting revenues of CN¥18.3b and earnings per share (EPS) of CN¥1.34 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice gain to earnings per share in particular.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥22.55, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Zhejiang NHU, with the most bullish analyst valuing it at CN¥25.20 and the most bearish at CN¥14.70 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhejiang NHU's past performance and to peers in the same industry. It's clear from the latest estimates that Zhejiang NHU's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 16% 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 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Zhejiang NHU is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Zhejiang NHU following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on Zhejiang NHU. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Zhejiang NHU analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Zhejiang NHU you should know about.
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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.