Jingjin Equipment Inc. Just Recorded A 5.3% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a good week for Jingjin Equipment Inc. (SHSE:603279) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.2% to CN¥23.25. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥1.5b, statutory earnings beat expectations 5.3%, with Jingjin Equipment reporting profits of CN¥0.40 per share. Following the result, the analysts have 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Jingjin Equipment after the latest results.

See our latest analysis for Jingjin Equipment

Taking into account the latest results, the most recent consensus for Jingjin Equipment from three analysts is for revenues of CN¥6.90b in 2024. If met, it would imply a meaningful 9.7% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 7.9% to CN¥1.94. In the lead-up to this report, the analysts had been modelling revenues of CN¥7.84b and earnings per share (EPS) of CN¥2.16 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

What's most unexpected is that the consensus price target rose 58% to CN¥33.00, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Jingjin Equipment's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Jingjin Equipment's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Jingjin Equipment.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jingjin Equipment. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Jingjin Equipment. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Jingjin Equipment analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Jingjin Equipment that you need to be mindful of.

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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.