Results: Sinoma International Engineering Co.,Ltd Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in Sinoma International Engineering Co.,Ltd (SHSE:600970) had a good week, as its shares rose 5.5% to close at CN¥11.24 following the release of its full-year results. Sinoma International EngineeringLtd reported CN¥46b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥1.12 beat expectations, being 9.2% higher than what the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sinoma International EngineeringLtd after the latest results.

See our latest analysis for Sinoma International EngineeringLtd

Taking into account the latest results, the consensus forecast from Sinoma International EngineeringLtd's 14 analysts is for revenues of CN¥51.1b in 2024. This reflects a meaningful 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 15% to CN¥1.27. Before this earnings report, the analysts had been forecasting revenues of CN¥51.0b and earnings per share (EPS) of CN¥1.19 in 2024. So the consensus seems to have become somewhat more optimistic on Sinoma International EngineeringLtd's earnings potential following these results.

The consensus price target was unchanged at CN¥14.49, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic Sinoma International EngineeringLtd analyst has a price target of CN¥16.29 per share, while the most pessimistic values it at CN¥13.30. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. We would highlight that Sinoma International EngineeringLtd's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. Compare this to the 107 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. So it's pretty clear that, while Sinoma International EngineeringLtd's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sinoma International EngineeringLtd's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at CN¥14.49, 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. At Simply Wall St, we have a full range of analyst estimates for Sinoma International EngineeringLtd going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Sinoma International EngineeringLtd that you need to take into consideration.

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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.