Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700) Analysts Are Reducing Their Forecasts For This Year

Today is shaping up negative for Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the six analysts covering Kunshan Dongwei TechnologyLtd are now predicting revenues of CN¥883m in 2024. If met, this would reflect a decent 10% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 36% to CN¥0.48. Previously, the analysts had been modelling revenues of CN¥1.4b and earnings per share (EPS) of CN¥0.99 in 2024. Indeed, we can see that the analysts are a lot more bearish about Kunshan Dongwei TechnologyLtd's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Kunshan Dongwei TechnologyLtd

Despite the cuts to forecast earnings, there was no real change to the CN¥36.02 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Kunshan Dongwei TechnologyLtd's growth to accelerate, with the forecast 21% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.5% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% 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 important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Kunshan Dongwei TechnologyLtd.

That said, the analysts might have good reason to be negative on Kunshan Dongwei TechnologyLtd, given its declining profit margins. Learn more, and discover the 3 other risks we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.