Earnings Report: Xiamen Faratronic Co., Ltd. Missed Revenue Estimates By 6.4%

As you might know, Xiamen Faratronic Co., Ltd. (SHSE:600563) last week released its latest annual, and things did not turn out so great for shareholders. Xiamen Faratronic missed analyst forecasts, with revenues of CN¥3.9b and statutory earnings per share (EPS) of CN¥4.55, falling short by 6.4% and 3.9% respectively. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Xiamen Faratronic after the latest results.

View our latest analysis for Xiamen Faratronic

Taking into account the latest results, the consensus forecast from Xiamen Faratronic's ten analysts is for revenues of CN¥4.70b in 2024. This reflects a huge 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 18% to CN¥5.37. Before this earnings report, the analysts had been forecasting revenues of CN¥5.44b and earnings per share (EPS) of CN¥6.21 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a real cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 5.4% to CN¥136. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Xiamen Faratronic at CN¥151 per share, while the most bearish prices it at CN¥117. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Xiamen Faratronic's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 21% growth on an annualised basis. That is in line with its 22% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. So although Xiamen Faratronic is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Xiamen Faratronic's future valuation.

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

You can also see our analysis of Xiamen Faratronic's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.