Analysts Have Made A Financial Statement On Huali Industrial Group Company Limited's (SZSE:300979) First-Quarter Report

Shareholders might have noticed that Huali Industrial Group Company Limited (SZSE:300979) filed its first-quarter result this time last week. The early response was not positive, with shares down 4.5% to CN¥64.00 in the past week. Results were roughly in line with estimates, with revenues of CN¥4.8b and statutory earnings per share of CN¥0.67. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Huali Industrial Group

After the latest results, the eleven analysts covering Huali Industrial Group are now predicting revenues of CN¥24.2b in 2024. If met, this would reflect a meaningful 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 12% to CN¥3.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥23.4b and earnings per share (EPS) of CN¥3.19 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.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥74.42, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Huali Industrial Group analyst has a price target of CN¥80.00 per share, while the most pessimistic values it at CN¥70.00. This is a very narrow spread of estimates, implying either that Huali Industrial Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. The analysts are definitely expecting Huali Industrial Group's growth to accelerate, with the forecast 19% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Huali Industrial Group to grow faster than 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 Huali Industrial Group's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider 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.

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. At Simply Wall St, we have a full range of analyst estimates for Huali Industrial Group going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Huali Industrial Group has 1 warning sign we think 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.