Results: Tongfu Microelectronics Co.,Ltd Beat Earnings Expectations And Analysts Now Have New Forecasts

Tongfu Microelectronics Co.,Ltd (SZSE:002156) shareholders are probably feeling a little disappointed, since its shares fell 3.5% to CN¥20.50 in the week after its latest annual results. Revenues of CN¥22b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.11 an impressive 31% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tongfu MicroelectronicsLtd after the latest results.

See our latest analysis for Tongfu MicroelectronicsLtd

Taking into account the latest results, the current consensus from Tongfu MicroelectronicsLtd's 14 analysts is for revenues of CN¥26.5b in 2024. This would reflect a decent 19% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 405% to CN¥0.56. In the lead-up to this report, the analysts had been modelling revenues of CN¥26.5b and earnings per share (EPS) of CN¥0.56 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of CN¥25.09, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Tongfu MicroelectronicsLtd analyst has a price target of CN¥30.00 per share, while the most pessimistic values it at CN¥21.60. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Tongfu MicroelectronicsLtd's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2024 being well below the historical 26% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 22% annually. Factoring in the forecast slowdown in growth, it looks like Tongfu MicroelectronicsLtd is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at CN¥25.09, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Tongfu MicroelectronicsLtd going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 3 warning signs for Tongfu MicroelectronicsLtd (of which 1 is a bit unpleasant!) you should know about.

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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.