Results: Tianshui Huatian Technology Co., Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for Tianshui Huatian Technology Co., Ltd. (SZSE:002185) shareholders, because the company has just released its latest annual results, and the shares gained 5.7% to CN¥8.01. It looks like a credible result overall - although revenues of CN¥11b were what the analysts expected, Tianshui Huatian Technology surprised by delivering a (statutory) profit of CN¥0.071 per share, an impressive 51% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Tianshui Huatian Technology

Following the latest results, Tianshui Huatian Technology's six analysts are now forecasting revenues of CN¥12.9b in 2024. This would be a decent 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 182% to CN¥0.20. Before this earnings report, the analysts had been forecasting revenues of CN¥13.2b and earnings per share (EPS) of CN¥0.18 in 2024. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of CN¥9.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Tianshui Huatian Technology, with the most bullish analyst valuing it at CN¥12.00 and the most bearish at CN¥6.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Tianshui Huatian Technology's growth to accelerate, with the forecast 14% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. So it's clear that despite the acceleration in growth, Tianshui Huatian Technology is expected to grow meaningfully slower than the industry average.

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 Tianshui Huatian Technology following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Tianshui Huatian Technology's revenue is expected to 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.

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 Tianshui Huatian Technology going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Tianshui Huatian Technology you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.