Sineng Electric Co.,Ltd. Just Missed EPS By 29%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Sineng Electric Co.,Ltd. (SZSE:300827), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. Unfortunately, Sineng ElectricLtd delivered a serious earnings miss. Revenues of CN¥4.9b were 11% below expectations, and statutory earnings per share of CN¥0.81 missed estimates by 29%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sineng ElectricLtd after the latest results.

See our latest analysis for Sineng ElectricLtd

Taking into account the latest results, the consensus forecast from Sineng ElectricLtd's dual analysts is for revenues of CN¥7.16b in 2024. This reflects a sizeable 45% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 97% to CN¥1.57. Before this earnings report, the analysts had been forecasting revenues of CN¥8.95b and earnings per share (EPS) of CN¥1.94 in 2024. Indeed, we can see that the analysts are a lot more bearish about Sineng ElectricLtd's prospects following the latest results, administering a large cut to revenue estimates and slashing their EPS estimates to boot.

What's most unexpected is that the consensus price target rose 13% to CN¥39.25, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

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 45% growth on an annualised basis. That is in line with its 40% 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 18% per year. So it's pretty clear that Sineng ElectricLtd is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sineng ElectricLtd. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Sineng ElectricLtd (including 1 which shouldn't be ignored) .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.