Shengyi Technology Co.,Ltd. Just Beat EPS By 23%: Here's What Analysts Think Will Happen Next

Shengyi Technology Co.,Ltd. (SHSE:600183) just released its first-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.5% to hit CN¥4.4b. Shengyi TechnologyLtd also reported a statutory profit of CN¥0.17, which was an impressive 23% above what the analysts had forecast. 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. 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 Shengyi TechnologyLtd

Taking into account the latest results, the most recent consensus for Shengyi TechnologyLtd from twelve analysts is for revenues of CN¥19.1b in 2024. If met, it would imply a notable 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 46% to CN¥0.81. In the lead-up to this report, the analysts had been modelling revenues of CN¥18.9b and earnings per share (EPS) of CN¥0.78 in 2024. So the consensus seems to have become somewhat more optimistic on Shengyi TechnologyLtd's earnings potential following these results.

There's been no major changes to the consensus price target of CN¥20.17, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Shengyi TechnologyLtd analyst has a price target of CN¥23.40 per share, while the most pessimistic values it at CN¥12.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 clear from the latest estimates that Shengyi TechnologyLtd's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 7.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Shengyi TechnologyLtd is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shengyi TechnologyLtd's earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CN¥20.17, with the latest estimates not enough to have an impact on their price targets.

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

Before you take the next step you should know about the 1 warning sign for Shengyi TechnologyLtd that we have uncovered.

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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.