Kunshan Dongwei Technology Co.,Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700) just released its latest quarterly report and things are not looking great. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥915m missed by 13%, and statutory earnings per share of CN¥0.69 fell short of forecasts by 29%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Kunshan Dongwei TechnologyLtd

Taking into account the latest results, the consensus forecast from Kunshan Dongwei TechnologyLtd's six analysts is for revenues of CN¥1.60b in 2024. This reflects a huge 76% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 111% to CN¥1.39. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.42b and earnings per share (EPS) of CN¥1.41 in 2024. It seems sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

As a result, it might come as a surprise that the consensus price target has been cut 9.4% to CN¥47.47, which could suggest that these earnings are considered less valuable by the market than previously. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Kunshan Dongwei TechnologyLtd analyst has a price target of CN¥66.00 per share, while the most pessimistic values it at CN¥37.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kunshan Dongwei TechnologyLtd's past performance and to peers in the same industry. The analysts are definitely expecting Kunshan Dongwei TechnologyLtd's growth to accelerate, with the forecast 112% annualised growth to the end of 2024 ranking favourably alongside historical growth of 20% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kunshan Dongwei TechnologyLtd is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Kunshan Dongwei TechnologyLtd analysts - going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Kunshan Dongwei TechnologyLtd (1 makes us a bit uncomfortable!) that 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.