Henan Shuanghui Investment & Development Co.,Ltd. Just Missed EPS By 13%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Henan Shuanghui Investment & Development Co.,Ltd. (SZSE:000895), given that the company fell short of expectations when it released its annual results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥60b, statutory earnings missed forecasts by 13%, coming in at just CN¥1.46 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.

Check out our latest analysis for Henan Shuanghui Investment & DevelopmentLtd

Following the latest results, Henan Shuanghui Investment & DevelopmentLtd's 14 analysts are now forecasting revenues of CN¥61.7b in 2024. This would be a credible 2.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 10% to CN¥1.61. Before this earnings report, the analysts had been forecasting revenues of CN¥70.1b and earnings per share (EPS) of CN¥1.81 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a substantial drop in earnings per share numbers as well.

The analysts made no major changes to their price target of CN¥29.77, suggesting the downgrades are not expected to have a long-term impact on Henan Shuanghui Investment & DevelopmentLtd's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Henan Shuanghui Investment & DevelopmentLtd, with the most bullish analyst valuing it at CN¥34.60 and the most bearish at CN¥21.00 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 Henan Shuanghui Investment & DevelopmentLtd's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 2.6% growth on an annualised basis. That is in line with its 2.7% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 13% annually. So it's pretty clear that Henan Shuanghui Investment & DevelopmentLtd is expected to grow slower than similar companies in the same 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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 Henan Shuanghui Investment & DevelopmentLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Henan Shuanghui Investment & DevelopmentLtd analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Henan Shuanghui Investment & DevelopmentLtd , and understanding them should be part of your investment process.

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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.