Hangzhou Honghua Digital Technology Stock Company LTD. Just Beat Revenue Estimates By 8.2%

Investors in Hangzhou Honghua Digital Technology Stock Company LTD. (SHSE:688789) had a good week, as its shares rose 2.4% to close at CN¥67.33 following the release of its annual results. It was a pretty mixed result, with revenues beating expectations to hit CN¥1.8b. Statutory earnings fell 2.1% short of analyst forecasts, reaching CN¥2.35 per share. 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 Hangzhou Honghua Digital Technology Stock after the latest results.

Check out our latest analysis for Hangzhou Honghua Digital Technology Stock

After the latest results, the seven analysts covering Hangzhou Honghua Digital Technology Stock are now predicting revenues of CN¥2.34b in 2025. If met, this would reflect a substantial 30% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 30% to CN¥3.08. Before this earnings report, the analysts had been forecasting revenues of CN¥2.12b and earnings per share (EPS) of CN¥3.10 in 2025. There's clearly been a surge in bullishness around the company's revenue pipeline, even if there's no real change in earnings per share forecasts.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of CN¥86.30, implying that the uplift in revenue is not expected to greatly contribute to Hangzhou Honghua Digital Technology Stock's valuation in the near term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Hangzhou Honghua Digital Technology Stock analyst has a price target of CN¥93.96 per share, while the most pessimistic values it at CN¥81.50. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. The analysts are definitely expecting Hangzhou Honghua Digital Technology Stock's growth to accelerate, with the forecast 30% annualised growth to the end of 2025 ranking favourably alongside historical growth of 19% per annum over the past five 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 Hangzhou Honghua Digital Technology Stock is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Hangzhou Honghua Digital Technology Stock going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Hangzhou Honghua Digital Technology Stock that we have uncovered.

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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.