Xiamen C&D Inc. Just Beat EPS By 17%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Xiamen C&D Inc. (SHSE:600153) released its yearly result to the market. The early response was not positive, with shares down 3.5% to CN¥10.15 in the past week. Revenues missed the mark, coming in 12% below forecasts, at CN¥764b. Statutory profits were better overall though, with per-share profits of CN¥4.29 being a notable 17% above what the analysts were modelling. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Xiamen C&D

Following last week's earnings report, Xiamen C&D's five analysts are forecasting 2024 revenues to be CN¥756.2b, approximately in line with the last 12 months. Statutory earnings per share are expected to crater 48% to CN¥2.28 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥943.6b and earnings per share (EPS) of CN¥2.40 in 2024. Indeed, we can see that sentiment has declined measurably after results came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

The consensus price target fell 7.3% to CN¥13.40, with the weaker earnings outlook clearly leading valuation estimates. 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 Xiamen C&D at CN¥16.65 per share, while the most bearish prices it at CN¥11.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Xiamen C&D shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 1.0% annualised decline to the end of 2024. That is a notable change from historical growth of 25% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Xiamen C&D is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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. We have estimates - from multiple Xiamen C&D analysts - 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 Xiamen C&D (including 1 which is significant) .

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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.