Inner Mongolia Yili Industrial Group Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a good week for Inner Mongolia Yili Industrial Group Co., Ltd. (SHSE:600887) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.3% to CN¥28.61. Revenues of CN¥32b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.93 an impressive 55% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Inner Mongolia Yili Industrial Group after the latest results.

See our latest analysis for Inner Mongolia Yili Industrial Group

Taking into account the latest results, the most recent consensus for Inner Mongolia Yili Industrial Group from 25 analysts is for revenues of CN¥131.2b in 2024. If met, it would imply an okay 4.7% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to reduce 4.9% to CN¥1.91 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥137.6b and earnings per share (EPS) of CN¥1.85 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The consensus has made no major changes to the price target of CN¥35.97, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Inner Mongolia Yili Industrial Group analyst has a price target of CN¥41.00 per share, while the most pessimistic values it at CN¥32.00. This is a very narrow spread of estimates, implying either that Inner Mongolia Yili Industrial Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Inner Mongolia Yili Industrial Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Inner Mongolia Yili Industrial Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.3% growth on an annualised basis. This is compared to a historical growth rate of 9.4% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Inner Mongolia Yili Industrial Group.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Inner Mongolia Yili Industrial Group following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Yet - earnings are more important to the intrinsic value of the business. 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 Inner Mongolia Yili Industrial Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Inner Mongolia Yili Industrial Group analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Inner Mongolia Yili Industrial Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.