Guangdong KinLong Hardware Products Co.,Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

Guangdong KinLong Hardware Products Co.,Ltd. (SZSE:002791) just released its latest second-quarter report and things are not looking great. Results showed a clear earnings miss, with CN¥1.8b revenue coming in 5.1% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.16 missed the mark badly, arriving some 56% below what was expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Guangdong KinLong Hardware ProductsLtd

Following the latest results, Guangdong KinLong Hardware ProductsLtd's nine analysts are now forecasting revenues of CN¥8.04b in 2024. This would be an okay 5.0% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CN¥0.99, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥8.37b and earnings per share (EPS) of CN¥1.39 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 24% to CN¥27.60. 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. Currently, the most bullish analyst values Guangdong KinLong Hardware ProductsLtd at CN¥34.40 per share, while the most bearish prices it at CN¥19.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 10% growth on an annualised basis. That is in line with its 9.3% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 14% per year. So it's pretty clear that Guangdong KinLong Hardware ProductsLtd is expected to grow slower than similar companies in the same 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Guangdong KinLong Hardware ProductsLtd going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Guangdong KinLong Hardware ProductsLtd's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.