Earnings Report: Jiugui Liquor Co., Ltd. Missed Revenue Estimates By 48%

It's been a good week for Jiugui Liquor Co., Ltd. (SZSE:000799) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.2% to CN¥51.09. Revenues were CN¥494m, 48% shy of what the analysts were expecting, although statutory earnings of CN¥1.69 per share were roughly in line with what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Jiugui Liquor after the latest results.

View our latest analysis for Jiugui Liquor

Following the latest results, Jiugui Liquor's ten analysts are now forecasting revenues of CN¥2.95b in 2024. This would be a reasonable 4.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 4.1% to CN¥1.76. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.18b and earnings per share (EPS) of CN¥2.29 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

The consensus price target fell 9.6% to CN¥66.38, 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. Currently, the most bullish analyst values Jiugui Liquor at CN¥100.00 per share, while the most bearish prices it at CN¥47.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Jiugui Liquor's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.6% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it seems obvious that Jiugui Liquor is also expected to grow slower than other industry participants.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Jiugui Liquor's future valuation.

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. We have forecasts for Jiugui Liquor going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Jiugui Liquor (of which 1 doesn't sit too well with us!) you should know about.

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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.