Shareholders of Dawning Information Industry Co., Ltd. (SHSE:603019) will be pleased this week, given that the stock price is up 12% to CN¥61.20 following its latest third-quarter results. Revenues of CN¥2.3b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.14 an impressive 82% ahead of estimates. 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 most recent consensus for Dawning Information Industry from ten analysts is for revenues of CN¥18.4b in 2025. If met, it would imply a major 26% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 36% to CN¥1.73. In the lead-up to this report, the analysts had been modelling revenues of CN¥18.6b and earnings per share (EPS) of CN¥1.75 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 6.7% to CN¥47.78despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Dawning Information Industry's earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Dawning Information Industry at CN¥64.20 per share, while the most bearish prices it at CN¥26.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Dawning Information Industry's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 10% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Dawning Information Industry 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Dawning Information Industry analysts - 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 Dawning Information Industry 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.
