Dongguan Yiheda Automation Co., Ltd (SZSE:301029) Analysts Just Slashed This Year's Estimates

Today is shaping up negative for Dongguan Yiheda Automation Co., Ltd (SZSE:301029) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Dongguan Yiheda Automation's eleven analysts is for revenues of CN¥3.1b in 2024, which would reflect a reasonable 6.5% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to ascend 16% to CN¥1.09. Previously, the analysts had been modelling revenues of CN¥3.6b and earnings per share (EPS) of CN¥1.32 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a considerable drop in earnings per share numbers as well.

Check out our latest analysis for Dongguan Yiheda Automation

It'll come as no surprise then, to learn that the analysts have cut their price target 9.6% to CN¥27.71.

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. It's pretty clear that there is an expectation that Dongguan Yiheda Automation's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.5% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. Factoring in the forecast slowdown in growth, it seems obvious that Dongguan Yiheda Automation is also expected to grow slower than other industry participants.

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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Dongguan Yiheda Automation.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Dongguan Yiheda Automation's business, like concerns around earnings quality. For more information, you can click here to discover this and the 1 other risk we've identified.

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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.