Shenzhen Kedali Industry Co., Ltd. Just Recorded A 12% EPS Beat: Here's What Analysts Are Forecasting Next

Shareholders of Shenzhen Kedali Industry Co., Ltd. (SZSE:002850) will be pleased this week, given that the stock price is up 11% to CN¥95.32 following its latest quarterly results. It looks like a credible result overall - although revenues of CN¥2.5b were in line with what the analysts predicted, Shenzhen Kedali Industry surprised by delivering a statutory profit of CN¥1.14 per share, a notable 12% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Shenzhen Kedali Industry

Following the latest results, Shenzhen Kedali Industry's 14 analysts are now forecasting revenues of CN¥12.7b in 2024. This would be a solid 19% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 8.0% to CN¥5.07. Before this earnings report, the analysts had been forecasting revenues of CN¥13.0b and earnings per share (EPS) of CN¥5.02 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of CN¥108, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Shenzhen Kedali Industry's market value. 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 Shenzhen Kedali Industry at CN¥120 per share, while the most bearish prices it at CN¥98.10. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shenzhen Kedali Industry's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Shenzhen Kedali Industry's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 25% growth on an annualised basis. This is compared to a historical growth rate of 40% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. So it's pretty clear that, while Shenzhen Kedali Industry's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded Shenzhen Kedali Industry's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at CN¥108, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Shenzhen Kedali Industry going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Shenzhen Kedali Industry (including 1 which shouldn't be ignored) .

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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.