Earnings Report: Asia Cuanon Technology (Shanghai) Co.,Ltd. Missed Revenue Estimates By 33%

Asia Cuanon Technology (Shanghai) Co.,Ltd. (SHSE:603378) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Asia Cuanon Technology (Shanghai)Ltd reported a serious miss, with revenue of CN¥295m falling a huge 33% short of analyst estimates. The bright side is that statutory earnings per share of CN¥0.14 were in line with forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Asia Cuanon Technology (Shanghai)Ltd after the latest results.

Check out our latest analysis for Asia Cuanon Technology (Shanghai)Ltd

Taking into account the latest results, the most recent consensus for Asia Cuanon Technology (Shanghai)Ltd from five analysts is for revenues of CN¥3.88b in 2024. If met, it would imply a sizeable 33% increase on its revenue over the past 12 months. Earnings are expected to improve, with Asia Cuanon Technology (Shanghai)Ltd forecast to report a statutory profit of CN¥0.64 per share. Before this earnings report, the analysts had been forecasting revenues of CN¥4.04b and earnings per share (EPS) of CN¥0.65 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

It will come as no surprise then, that the consensus price target fell 6.9% to CN¥10.98following these changes. 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. Currently, the most bullish analyst values Asia Cuanon Technology (Shanghai)Ltd at CN¥12.60 per share, while the most bearish prices it at CN¥9.84. This is a very narrow spread of estimates, implying either that Asia Cuanon Technology (Shanghai)Ltd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Asia Cuanon Technology (Shanghai)Ltd's rate of growth is expected to accelerate meaningfully, with the forecast 47% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 7.1% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Asia Cuanon Technology (Shanghai)Ltd to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Asia Cuanon Technology (Shanghai)Ltd analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Asia Cuanon Technology (Shanghai)Ltd has 2 warning signs (and 1 which is potentially serious) we think you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.