Luyang Energy-Saving Materials Co., Ltd. (SZSE:002088) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in 7.4% below expectations, at CN¥701m. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.97 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Luyang Energy-Saving Materials' dual analysts are now forecasting revenues of CN¥3.68b in 2024. This would be a credible 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 18% to CN¥1.07. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.87b and earnings per share (EPS) of CN¥1.12 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The consensus price target fell 7.4% to CN¥15.65, with the weaker earnings outlook clearly leading valuation estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Luyang Energy-Saving Materials' revenue growth is expected to slow, with the forecast 7.7% annualised growth rate until the end of 2024 being well below the historical 13% 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 15% per year. Factoring in the forecast slowdown in growth, it seems obvious that Luyang Energy-Saving Materials is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Luyang Energy-Saving Materials. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Luyang Energy-Saving Materials' future valuation.
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 analyst estimates for Luyang Energy-Saving Materials going out as far as 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 Luyang Energy-Saving Materials 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.
