Yutong Heavy Industries Co.,Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Yutong Heavy Industries Co.,Ltd. (SHSE:600817) last week released its latest annual, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 7.5% short of analyst estimates at CN¥2.9b, and statutory earnings of CN¥0.40 per share missed forecasts by 9.1%. Following the result, the analyst has 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. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

Check out our latest analysis for Yutong Heavy IndustriesLtd

Taking into account the latest results, the consensus forecast from Yutong Heavy IndustriesLtd's single analyst is for revenues of CN¥3.24b in 2024. This reflects a meaningful 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 28% to CN¥0.52. In the lead-up to this report, the analyst had been modelling revenues of CN¥3.44b and earnings per share (EPS) of CN¥0.53 in 2024. So it looks like the analyst has 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¥10.19, showing that the analyst doesn't expect weaker revenue expectations next year to have a material impact on Yutong Heavy IndustriesLtd's market value.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Yutong Heavy IndustriesLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. Factoring in the forecast slowdown in growth, it seems obvious that Yutong Heavy IndustriesLtd is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analyst reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. 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 in mind, we wouldn't be too quick to come to a conclusion on Yutong Heavy IndustriesLtd. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Even so, be aware that Yutong Heavy IndustriesLtd is showing 3 warning signs in our investment analysis , and 1 of those is concerning...

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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.