Earnings Miss: Jiangsu Hengshun Vinegar-Industry Co.,Ltd Missed EPS By 28% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Jiangsu Hengshun Vinegar-Industry Co.,Ltd (SHSE:600305), given that the company fell short of expectations when it released its first-quarter results last week. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥460m) coming in 23% below what they had expected. Statutory earnings per share of CN¥0.05 fell 28% 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Jiangsu Hengshun Vinegar-IndustryLtd after the latest results.

See our latest analysis for Jiangsu Hengshun Vinegar-IndustryLtd

Taking into account the latest results, the consensus forecast from Jiangsu Hengshun Vinegar-IndustryLtd's eight analysts is for revenues of CN¥2.18b in 2024. This reflects a decent 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 213% to CN¥0.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.42b and earnings per share (EPS) of CN¥0.21 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the CN¥8.63 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Jiangsu Hengshun Vinegar-IndustryLtd, with the most bullish analyst valuing it at CN¥11.00 and the most bearish at CN¥6.50 per share. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Jiangsu Hengshun Vinegar-IndustryLtd's growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.4% 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 9.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jiangsu Hengshun Vinegar-IndustryLtd is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jiangsu Hengshun Vinegar-IndustryLtd. They also downgraded Jiangsu Hengshun Vinegar-IndustryLtd's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at CN¥8.63, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Jiangsu Hengshun Vinegar-IndustryLtd analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Jiangsu Hengshun Vinegar-IndustryLtd is showing 3 warning signs in our investment analysis , and 1 of those is significant...

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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.