Earnings Beat: Haier Smart Home Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Haier Smart Home Co., Ltd. (SHSE:600690) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥136b, statutory earnings beat expectations 6.9%, with Haier Smart Home reporting profits of CN¥0.61 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Haier Smart Home

Taking into account the latest results, the current consensus from Haier Smart Home's 26 analysts is for revenues of CN¥272.2b in 2024. This would reflect a credible 2.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 30,394% to CN¥2.02. In the lead-up to this report, the analysts had been modelling revenues of CN¥280.4b and earnings per share (EPS) of CN¥2.01 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at CN¥32.47even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Haier Smart Home at CN¥39.30 per share, while the most bearish prices it at CN¥23.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that Haier Smart Home's revenue growth is expected to slow, with the forecast 5.1% annualised growth rate until the end of 2024 being well below the historical 6.9% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Haier Smart Home.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at CN¥32.47, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Haier Smart Home. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Haier Smart Home analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Haier Smart Home (1 doesn't sit too well with us) you should be aware of.

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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.