Yunnan Yuntianhua Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Yunnan Yuntianhua Co., Ltd. (SHSE:600096), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. Yunnan Yuntianhua missed analyst forecasts, with revenues of CN¥69b and statutory earnings per share (EPS) of CN¥2.47, falling short by 3.3% and 8.0% respectively. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Yunnan Yuntianhua

Taking into account the latest results, the most recent consensus for Yunnan Yuntianhua from eight analysts is for revenues of CN¥71.5b in 2024. If met, it would imply a reasonable 3.5% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 5.5% to CN¥2.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥73.3b and earnings per share (EPS) of CN¥2.87 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to CN¥24.81. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Yunnan Yuntianhua analyst has a price target of CN¥27.94 per share, while the most pessimistic values it at CN¥22.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Yunnan Yuntianhua's past performance and to peers in the same industry. We would highlight that Yunnan Yuntianhua's revenue growth is expected to slow, with the forecast 3.5% annualised growth rate until the end of 2024 being well below the historical 7.8% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. Factoring in the forecast slowdown in growth, it seems obvious that Yunnan Yuntianhua 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. 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Yunnan Yuntianhua's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Yunnan Yuntianhua. Long-term earnings power is much more important than next year's profits. We have forecasts for Yunnan Yuntianhua going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Yunnan Yuntianhua that you need to be mindful of.

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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.