CN¥39.31: That's What Analysts Think Guangdong KinLong Hardware Products Co.,Ltd. (SZSE:002791) Is Worth After Its Latest Results

Investors in Guangdong KinLong Hardware Products Co.,Ltd. (SZSE:002791) had a good week, as its shares rose 2.6% to close at CN¥31.14 following the release of its first-quarter results. Revenues of CN¥1.4b arrived in line with expectations, although statutory losses per share were CN¥0.14, an impressive 45% smaller than what broker models predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Guangdong KinLong Hardware ProductsLtd

After the latest results, the ten analysts covering Guangdong KinLong Hardware ProductsLtd are now predicting revenues of CN¥8.41b in 2024. If met, this would reflect an okay 7.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 42% to CN¥1.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥8.58b and earnings per share (EPS) of CN¥1.61 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The average price target fell 10% to CN¥39.31, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Guangdong KinLong Hardware ProductsLtd at CN¥47.13 per share, while the most bearish prices it at CN¥28.10. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Guangdong KinLong Hardware ProductsLtd'shistorical trends, as the 10% annualised revenue growth to the end of 2024 is roughly in line with the 11% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 15% annually. So although Guangdong KinLong Hardware ProductsLtd is expected to maintain its revenue growth rate, it's forecast to grow slower 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 Guangdong KinLong Hardware ProductsLtd. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Guangdong KinLong Hardware ProductsLtd's revenue is expected to perform worse 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 in mind, we wouldn't be too quick to come to a conclusion on Guangdong KinLong Hardware ProductsLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Guangdong KinLong Hardware ProductsLtd analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Guangdong KinLong Hardware ProductsLtd Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.