DaShenLin Pharmaceutical Group Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

DaShenLin Pharmaceutical Group Co., Ltd. (SHSE:603233) just released its latest quarterly report and things are not looking great. Results showed a clear earnings miss, with CN¥6.6b revenue coming in 9.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.23 missed the mark badly, arriving some 36% below what was expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for DaShenLin Pharmaceutical Group

Following the latest results, DaShenLin Pharmaceutical Group's nine analysts are now forecasting revenues of CN¥27.5b in 2024. This would be a reasonable 6.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 33% to CN¥1.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥29.1b and earnings per share (EPS) of CN¥1.24 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.4% to CN¥27.63. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values DaShenLin Pharmaceutical Group at CN¥32.00 per share, while the most bearish prices it at CN¥19.90. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that DaShenLin Pharmaceutical Group's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% annually. Factoring in the forecast slowdown in growth, it looks like DaShenLin Pharmaceutical Group is forecast to grow at about the same rate as the wider 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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for DaShenLin Pharmaceutical Group going out to 2026, and you can see them free on our platform here.

Even so, be aware that DaShenLin Pharmaceutical Group is showing 2 warning signs in our investment analysis , you should know about...

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.