Sino Wealth Electronic Ltd. (SZSE:300327) Just Reported And Analysts Have Been Cutting Their Estimates

Sino Wealth Electronic Ltd. (SZSE:300327) just released its full-year report and things are looking bullish. The company beat expectations with revenues of CN¥1.3b arriving 2.1% ahead of forecasts. Statutory earnings per share (EPS) were CN¥0.55, 3.9% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Sino Wealth Electronic

Following the latest results, Sino Wealth Electronic's four analysts are now forecasting revenues of CN¥1.52b in 2024. This would be a notable 17% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 21% to CN¥0.43 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.91b and earnings per share (EPS) of CN¥0.87 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a pretty serious reduction to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

The analysts made no major changes to their price target of CN¥30.01, suggesting the downgrades are not expected to have a long-term impact on Sino Wealth Electronic'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. The most optimistic Sino Wealth Electronic analyst has a price target of CN¥40.15 per share, while the most pessimistic values it at CN¥19.40. 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.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 17% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 23% per year. So it's pretty clear that Sino Wealth Electronic is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sino Wealth Electronic. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Sino Wealth Electronic. Long-term earnings power is much more important than next year's profits. We have forecasts for Sino Wealth Electronic going out to 2026, and you can see them free on our platform here.

Even so, be aware that Sino Wealth Electronic is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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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.