Results: Shanghai Awinic Technology Co.,Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, Shanghai Awinic Technology Co.,Ltd. (SHSE:688798) recently reported its quarterly numbers. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 14% higher than the analysts had forecast, at CN¥776m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. 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 Shanghai Awinic TechnologyLtd after the latest results.

See our latest analysis for Shanghai Awinic TechnologyLtd

Taking into account the latest results, Shanghai Awinic TechnologyLtd's eight analysts currently expect revenues in 2024 to be CN¥3.12b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 9.0% to CN¥0.83 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.09b and earnings per share (EPS) of CN¥0.72 in 2024. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The average the analysts price target fell 11% to CN¥78.31, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. 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 Shanghai Awinic TechnologyLtd, with the most bullish analyst valuing it at CN¥100.00 and the most bearish at CN¥55.38 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 pretty clear that there is an expectation that Shanghai Awinic TechnologyLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.6% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 22% annually. Factoring in the forecast slowdown in growth, it seems obvious that Shanghai Awinic TechnologyLtd is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Shanghai Awinic TechnologyLtd following these results. 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 Shanghai Awinic TechnologyLtd's future valuation.

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 forecasts for Shanghai Awinic TechnologyLtd going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Shanghai Awinic TechnologyLtd 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.