Shanghai Flyco Electrical Appliance Co., Ltd. (SHSE:603868) came out with its half-yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥2.3b, statutory earnings were in line with expectations, at CN¥2.34 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the six analysts covering Shanghai Flyco Electrical Appliance are now predicting revenues of CN¥4.96b in 2024. If met, this would reflect a satisfactory 5.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 19% to CN¥1.98. Before this earnings report, the analysts had been forecasting revenues of CN¥5.44b and earnings per share (EPS) of CN¥2.37 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
The consensus price target fell 9.2% to CN¥54.91, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Shanghai Flyco Electrical Appliance at CN¥65.75 per share, while the most bearish prices it at CN¥41.37. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Shanghai Flyco Electrical Appliance's growth to accelerate, with the forecast 11% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.5% per annum 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 16% per year. So it's clear that despite the acceleration in growth, Shanghai Flyco Electrical Appliance is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shanghai Flyco Electrical Appliance. 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. 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.
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 forecasts for Shanghai Flyco Electrical Appliance going out to 2026, and you can see them free on our platform here.
Even so, be aware that Shanghai Flyco Electrical Appliance is showing 1 warning sign in our investment analysis , 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.
