Need To Know: The Consensus Just Cut Its Sichuan Em Technology Co., Ltd. (SHSE:601208) Estimates For 2024

The analysts covering Sichuan Em Technology Co., Ltd. (SHSE:601208) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Sichuan Em Technology from its six analysts is for revenues of CN¥5.0b in 2024 which, if met, would be a major 34% increase on its sales over the past 12 months. Per-share earnings are expected to leap 51% to CN¥0.63. Prior to this update, the analysts had been forecasting revenues of CN¥6.5b and earnings per share (EPS) of CN¥0.65 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a sizeable cut to revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for Sichuan Em Technology

Analysts made no major changes to their price target of CN¥14.21, suggesting the downgrades are not expected to have a long-term impact on Sichuan Em Technology's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Sichuan Em Technology's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 21% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sichuan Em Technology to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Sichuan Em Technology. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Sichuan Em Technology after today.

There might be good reason for analyst bearishness towards Sichuan Em Technology, like concerns around earnings quality. For more information, you can click here to discover this and the 1 other risk we've identified.

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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.