Results: Shanghai Moons' Electric Co., Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

Shanghai Moons' Electric Co., Ltd. (SHSE:603728) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 6.4% to hit CN¥656m. Shanghai Moons' Electric also reported a statutory profit of CN¥0.08, which was an impressive 34% above what the analysts had forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Shanghai Moons' Electric

Taking into account the latest results, the current consensus from Shanghai Moons' Electric's three analysts is for revenues of CN¥2.81b in 2024. This would reflect a solid 12% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 41% to CN¥0.43. Before this earnings report, the analysts had been forecasting revenues of CN¥3.00b and earnings per share (EPS) of CN¥0.56 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 29% to CN¥39.28, with the weaker earnings outlook clearly leading valuation estimates. 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 Shanghai Moons' Electric analyst has a price target of CN¥42.40 per share, while the most pessimistic values it at CN¥34.43. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Shanghai Moons' Electric is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shanghai Moons' Electric's past performance and to peers in the same industry. The analysts are definitely expecting Shanghai Moons' Electric's growth to accelerate, with the forecast 26% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shanghai Moons' Electric to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shanghai Moons' Electric. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shanghai Moons' Electric's future valuation.

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 forecasts for Shanghai Moons' Electric going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Shanghai Moons' Electric you should be aware 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.