An Hui Wenergy Company Limited Just Missed EPS By 6.7%: Here's What Analysts Think Will Happen Next

An Hui Wenergy Company Limited (SZSE:000543) shareholders are probably feeling a little disappointed, since its shares fell 2.3% to CN¥8.62 in the week after its latest annual results. An Hui Wenergy beat revenue expectations by 3.6%, at CN¥28b. Statutory earnings per share (EPS) came in at CN¥0.63, some 6.7% short of analyst estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on An Hui Wenergy after the latest results.

Check out our latest analysis for An Hui Wenergy

Taking into account the latest results, the most recent consensus for An Hui Wenergy from seven analysts is for revenues of CN¥28.6b in 2024. If met, it would imply an okay 2.7% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 26% to CN¥0.79. In the lead-up to this report, the analysts had been modelling revenues of CN¥29.0b and earnings per share (EPS) of CN¥0.74 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 5.2% to CN¥7.97, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on An Hui Wenergy, with the most bullish analyst valuing it at CN¥9.49 and the most bearish at CN¥7.23 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting An Hui Wenergy is an easy business to forecast or the the analysts are all using similar assumptions.

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 pretty clear that there is an expectation that An Hui Wenergy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that An Hui Wenergy is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards An Hui Wenergy following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that An Hui Wenergy's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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

However, before you get too enthused, we've discovered 1 warning sign for An Hui Wenergy 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.