Hundsun Technologies Inc. Just Beat EPS By 5.7%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Hundsun Technologies Inc. (SHSE:600570) released its full-year result to the market. The early response was not positive, with shares down 4.9% to CN¥23.43 in the past week. The result was positive overall - although revenues of CN¥7.3b were in line with what the analysts predicted, Hundsun Technologies surprised by delivering a statutory profit of CN¥0.75 per share, modestly greater than expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Hundsun Technologies

Following the latest results, Hundsun Technologies' 20 analysts are now forecasting revenues of CN¥8.11b in 2024. This would be a solid 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 20% to CN¥0.90. In the lead-up to this report, the analysts had been modelling revenues of CN¥8.93b and earnings per share (EPS) of CN¥1.08 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The analysts made no major changes to their price target of CN¥37.79, suggesting the downgrades are not expected to have a long-term impact on Hundsun Technologies' valuation. 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 Hundsun Technologies, with the most bullish analyst valuing it at CN¥54.00 and the most bearish at CN¥19.40 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. It's pretty clear that there is an expectation that Hundsun Technologies' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 22% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hundsun Technologies.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hundsun Technologies. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥37.79, 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. We have forecasts for Hundsun Technologies 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 1 warning sign for Hundsun Technologies 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.