COFCO Technology & Industry Co., Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

The analysts might have been a bit too bullish on COFCO Technology & Industry Co., Ltd. (SZSE:301058), given that the company fell short of expectations when it released its yearly results last week. Earnings came in short of expectations, with revenues of CN¥2.4b missing the mark by 23%, and statutory earnings per share of CN¥0.42 falling 2.9% short. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for COFCO Technology & Industry

Following the latest results, COFCO Technology & Industry's four analysts are now forecasting revenues of CN¥3.21b in 2024. This would be a sizeable 33% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 19% to CN¥0.51. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.92b and earnings per share (EPS) of CN¥0.56 in 2024. It looks like sentiment has fallen somewhat in the aftermath of these results, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

The consensus price target fell 12% to CN¥12.37, with the weaker earnings outlook clearly leading valuation estimates.

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. The analysts are definitely expecting COFCO Technology & Industry's growth to accelerate, with the forecast 33% annualised growth to the end of 2024 ranking favourably alongside historical growth of 9.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that COFCO Technology & Industry is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of COFCO Technology & Industry's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple COFCO Technology & Industry analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for COFCO Technology & Industry that you need to take into consideration.

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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.