Jiangsu Hengshun Vinegar-Industry Co.,Ltd Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Jiangsu Hengshun Vinegar-Industry Co.,Ltd (SHSE:600305), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥544m, statutory earnings missed forecasts by an incredible 34%, coming in at just CN¥0.03 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Jiangsu Hengshun Vinegar-IndustryLtd

Taking into account the latest results, the current consensus from Jiangsu Hengshun Vinegar-IndustryLtd's seven analysts is for revenues of CN¥2.10b in 2024. This would reflect a credible 6.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 178% to CN¥0.14. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.20b and earnings per share (EPS) of CN¥0.15 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The consensus price target fell 6.0% to CN¥7.60, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on Jiangsu Hengshun Vinegar-IndustryLtd, with the most bullish analyst valuing it at CN¥9.00 and the most bearish at CN¥6.00 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Jiangsu Hengshun Vinegar-IndustryLtd's past performance and to peers in the same industry. It's clear from the latest estimates that Jiangsu Hengshun Vinegar-IndustryLtd's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.7% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Jiangsu Hengshun Vinegar-IndustryLtd is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. At Simply Wall St, we have a full range of analyst estimates for Jiangsu Hengshun Vinegar-IndustryLtd going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Jiangsu Hengshun Vinegar-IndustryLtd (1 can't be ignored!) that you need to take into consideration.

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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.