Yongxing Special Materials Technology Co.,Ltd (SZSE:002756) Analysts Just Cut Their EPS Forecasts Substantially

The analysts covering Yongxing Special Materials Technology Co.,Ltd (SZSE:002756) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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Following the downgrade, the consensus from seven analysts covering Yongxing Special Materials TechnologyLtd is for revenues of CN¥7.9b in 2025, implying a small 2.7% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to fall 11% to CN¥1.77 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥9.2b and earnings per share (EPS) of CN¥2.14 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

View our latest analysis for Yongxing Special Materials TechnologyLtd

Despite the cuts to forecast earnings, there was no real change to the CN¥37.34 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 2.7% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 19% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Yongxing Special Materials TechnologyLtd is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Yongxing Special Materials TechnologyLtd after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Yongxing Special Materials TechnologyLtd going out to 2027, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.