Huizhou Desay SV Automotive Co., Ltd. Just Missed EPS By 5.6%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Huizhou Desay SV Automotive Co., Ltd. (SZSE:002920) filed its annual result this time last week. The early response was not positive, with shares down 2.4% to CN¥121 in the past week. It looks like the results were a bit of a negative overall. While revenues of CN¥28b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.6% to hit CN¥3.62 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.

Check out our latest analysis for Huizhou Desay SV Automotive

Taking into account the latest results, the consensus forecast from Huizhou Desay SV Automotive's 22 analysts is for revenues of CN¥35.0b in 2025. This reflects a substantial 27% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 35% to CN¥4.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥35.3b and earnings per share (EPS) of CN¥5.10 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥141, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Huizhou Desay SV Automotive analyst has a price target of CN¥190 per share, while the most pessimistic values it at CN¥95.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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 pretty clear that there is an expectation that Huizhou Desay SV Automotive's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 27% growth on an annualised basis. This is compared to a historical growth rate of 34% 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) 19% per year. So it's pretty clear that, while Huizhou Desay SV Automotive's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Huizhou Desay SV Automotive. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Huizhou Desay SV Automotive going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Huizhou Desay SV Automotive (at least 1 which is significant) , and understanding these should be part of your investment process.

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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.