Analysts Have Made A Financial Statement On AviChina Industry & Technology Company Limited's (HKG:2357) Full-Year Report

Shareholders of AviChina Industry & Technology Company Limited (HKG:2357) will be pleased this week, given that the stock price is up 11% to HK$5.21 following its latest yearly results. Results overall were respectable, with statutory earnings of CN¥0.26 per share roughly in line with what the analysts had forecast. Revenues of CN¥50b came in 4.3% ahead of analyst predictions. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for AviChina Industry & Technology

After the latest results, the three analysts covering AviChina Industry & Technology are now predicting revenues of CN¥51.5b in 2021. If met, this would reflect a satisfactory 2.8% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to increase 9.4% to CN¥0.28. Before this earnings report, the analysts had been forecasting revenues of CN¥51.5b and earnings per share (EPS) of CN¥0.28 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CN¥6.16. 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 AviChina Industry & Technology at CN¥8.97 per share, while the most bearish prices it at CN¥5.80. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AviChina Industry & Technology's past performance and to peers in the same industry. It's pretty clear that there is an expectation that AviChina Industry & Technology's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 2.8% growth on an annualised basis. This is compared to a historical growth rate of 6.7% 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 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than AviChina Industry & Technology.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at CN¥6.16, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple AviChina Industry & Technology analysts - going out to 2022, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for AviChina Industry & Technology you should know about.

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