Zhejiang Weixing Industrial Development Co., Ltd. Beat Revenue Forecasts By 15%: Here's What Analysts Are Forecasting Next

The quarterly results for Zhejiang Weixing Industrial Development Co., Ltd. (SZSE:002003) were released last week, making it a good time to revisit its performance. It was a mildly positive result, with revenues exceeding expectations at CN¥1.5b, while statutory earnings per share (EPS) of CN¥0.53 were in line with analyst forecasts. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Zhejiang Weixing Industrial Development

After the latest results, the ten analysts covering Zhejiang Weixing Industrial Development are now predicting revenues of CN¥4.66b in 2024. If met, this would reflect a reasonable 6.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 6.6% to CN¥0.60. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.52b and earnings per share (EPS) of CN¥0.56 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of CN¥13.71, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Zhejiang Weixing Industrial Development analyst has a price target of CN¥15.00 per share, while the most pessimistic values it at CN¥12.70. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Zhejiang Weixing Industrial Development is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhejiang Weixing Industrial Development's past performance and to peers in the same industry. The analysts are definitely expecting Zhejiang Weixing Industrial Development's growth to accelerate, with the forecast 13% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Zhejiang Weixing Industrial Development is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zhejiang Weixing Industrial Development's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Zhejiang Weixing Industrial Development will grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Zhejiang Weixing Industrial Development. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Zhejiang Weixing Industrial Development 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 Zhejiang Weixing Industrial Development that you should be aware of.

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.