Zhejiang Sanmei Chemical Industry Co.,Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

Zhejiang Sanmei Chemical Industry Co.,Ltd. (SHSE:603379) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥3.3b, statutory earnings missed forecasts by 13%, coming in at just CN¥0.46 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Zhejiang Sanmei Chemical IndustryLtd

Taking into account the latest results, the most recent consensus for Zhejiang Sanmei Chemical IndustryLtd from four analysts is for revenues of CN¥5.61b in 2024. If met, it would imply a sizeable 68% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 429% to CN¥2.45. Before this earnings report, the analysts had been forecasting revenues of CN¥4.99b and earnings per share (EPS) of CN¥1.48 in 2024. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥59.07, suggesting that the forecast performance does not have a long term impact on the company's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhejiang Sanmei Chemical IndustryLtd's past performance and to peers in the same industry. It's clear from the latest estimates that Zhejiang Sanmei Chemical IndustryLtd's rate of growth is expected to accelerate meaningfully, with the forecast 68% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.6% 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 Zhejiang Sanmei Chemical IndustryLtd to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zhejiang Sanmei Chemical IndustryLtd's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at CN¥59.07, with the latest estimates not enough to have an impact on their price targets.

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 Zhejiang Sanmei Chemical IndustryLtd going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Zhejiang Sanmei Chemical IndustryLtd Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.