China Animal Husbandry Industry Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on China Animal Husbandry Industry Co., Ltd. (SHSE:600195), given that the company fell short of expectations when it released its half-yearly results last week. Results showed a clear earnings miss, with CN¥2.5b revenue coming in 6.8% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.061 missed the mark badly, arriving some 53% below what was expected. 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 China Animal Husbandry Industry after the latest results.

See our latest analysis for China Animal Husbandry Industry

Taking into account the latest results, China Animal Husbandry Industry's eight analysts currently expect revenues in 2024 to be CN¥5.49b, approximately in line with the last 12 months. Per-share earnings are expected to soar 166% to CN¥0.23. In the lead-up to this report, the analysts had been modelling revenues of CN¥5.86b and earnings per share (EPS) of CN¥0.37 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The analysts made no major changes to their price target of CN¥8.86, suggesting the downgrades are not expected to have a long-term impact on China Animal Husbandry Industry's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on China Animal Husbandry Industry, with the most bullish analyst valuing it at CN¥12.00 and the most bearish at CN¥7.10 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await China Animal Husbandry Industry shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that China Animal Husbandry Industry's revenue growth is expected to slow, with the forecast 2.5% annualised growth rate until the end of 2024 being well below the historical 5.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that China Animal Husbandry Industry is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. At Simply Wall St, we have a full range of analyst estimates for China Animal Husbandry Industry going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for China Animal Husbandry Industry (1 is a bit concerning!) that you need to be mindful of.

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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.