Zhongfu Shenying Carbon Fiber Co.,Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Zhongfu Shenying Carbon Fiber Co.,Ltd. (SHSE:688295) just released its latest annual report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥2.3b, statutory earnings missed forecasts by 17%, coming in at just CN¥0.35 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.

View our latest analysis for Zhongfu Shenying Carbon FiberLtd

Following the latest results, Zhongfu Shenying Carbon FiberLtd's nine analysts are now forecasting revenues of CN¥2.53b in 2024. This would be a decent 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 10% to CN¥0.39. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.51b and earnings per share (EPS) of CN¥0.67 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

It might be a surprise to learn that the consensus price target fell 6.1% to CN¥36.53, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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 Zhongfu Shenying Carbon FiberLtd, with the most bullish analyst valuing it at CN¥47.95 and the most bearish at CN¥29.60 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Zhongfu Shenying Carbon FiberLtd's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 30% 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 Zhongfu Shenying Carbon FiberLtd is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zhongfu Shenying Carbon FiberLtd. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zhongfu Shenying Carbon FiberLtd's future valuation.

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 Zhongfu Shenying Carbon FiberLtd going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Zhongfu Shenying Carbon FiberLtd (1 shouldn't be ignored!) that we have uncovered.

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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.