Earnings Report: S.F. Holding Co., Ltd. Missed Revenue Estimates By 5.8%

S.F. Holding Co., Ltd. (SZSE:002352) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 5.8% short of analyst estimates at CN¥258b, and statutory earnings of CN¥1.70 per share missed forecasts by 4.1%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for S.F. Holding

Taking into account the latest results, the current consensus from S.F. Holding's 19 analysts is for revenues of CN¥288.6b in 2024. This would reflect a meaningful 12% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 15% to CN¥1.96. Before this earnings report, the analysts had been forecasting revenues of CN¥307.3b and earnings per share (EPS) of CN¥2.17 in 2024. 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.

It'll come as no surprise then, to learn that the analysts have cut their price target 12% to CN¥48.96. 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. The most optimistic S.F. Holding analyst has a price target of CN¥63.00 per share, while the most pessimistic values it at CN¥34.10. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the S.F. Holding's past performance and to peers in the same industry. It's pretty clear that there is an expectation that S.F. Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Compare this to the 29 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it's pretty clear that, while S.F. Holding's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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

Plus, you should also learn about the 1 warning sign we've spotted with S.F. Holding .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.