Earnings Miss: Zhejiang Dahua Technology Co., Ltd. Missed EPS By 11% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Zhejiang Dahua Technology Co., Ltd. (SZSE:002236), given that the company fell short of expectations when it released its yearly results last week. Zhejiang Dahua Technology missed earnings this time around, with CN¥32b revenue coming in 3.7% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥0.90 also fell short of expectations by 11%. 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.

Taking into account the latest results, the most recent consensus for Zhejiang Dahua Technology from 13 analysts is for revenues of CN¥35.1b in 2025. If met, it would imply a meaningful 9.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 23% to CN¥1.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥37.2b and earnings per share (EPS) of CN¥1.22 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

View our latest analysis for Zhejiang Dahua Technology

Despite the cuts to forecast earnings, there was no real change to the CN¥19.50 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values Zhejiang Dahua Technology at CN¥26.70 per share, while the most bearish prices it at CN¥14.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhejiang Dahua Technology's past performance and to peers in the same industry. It's clear from the latest estimates that Zhejiang Dahua Technology's rate of growth is expected to accelerate meaningfully, with the forecast 9.1% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.7% p.a. 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 18% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Zhejiang Dahua Technology is expected to grow slower than 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. 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¥19.50, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Zhejiang Dahua Technology going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Zhejiang Dahua Technology that you should be aware of.

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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.