Lao Feng Xiang Co., Ltd. (SHSE:600612) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. Lao Feng Xiang delivered a grave earnings miss, with both revenues (CN¥13b) and statutory earnings per share (CN¥0.71) falling badly short of analyst expectations. 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 Lao Feng Xiang after the latest results.
Taking into account the latest results, the most recent consensus for Lao Feng Xiang from 13 analysts is for revenues of CN¥80.5b in 2025. If met, it would imply a major 30% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 28% to CN¥4.97. In the lead-up to this report, the analysts had been modelling revenues of CN¥83.1b and earnings per share (EPS) of CN¥5.07 in 2025. 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.
The consensus has reconfirmed its price target of CN¥58.95, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Lao Feng Xiang's market 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. There are some variant perceptions on Lao Feng Xiang, with the most bullish analyst valuing it at CN¥70.61 and the most bearish at CN¥45.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's clear from the latest estimates that Lao Feng Xiang's rate of growth is expected to accelerate meaningfully, with the forecast 23% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 8.4% 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 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Lao Feng Xiang to grow faster than the wider 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. They also downgraded Lao Feng Xiang's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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 Lao Feng Xiang going out to 2026, and you can see them free on our platform here..
We also provide an overview of the Lao Feng Xiang Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.