Yue Yuen Industrial (Holdings) Limited (HKG:551) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Investors in Yue Yuen Industrial (Holdings) Limited (HKG:551) had a good week, as its shares rose 8.5% to close at HK$12.98 following the release of its quarterly results. It was an okay result overall, with revenues coming in at US$2.0b, roughly what the analysts had been expecting. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Yue Yuen Industrial (Holdings)

Following the latest results, Yue Yuen Industrial (Holdings)'s 14 analysts are now forecasting revenues of US$8.06b in 2024. This would be a modest 3.9% improvement in revenue compared to the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$8.23b and earnings per share (EPS) of US$0.22 in 2024. So we can see that while the consensus made a minor downgrade to revenue estimates, it no longer provides an earnings per share estimate. This suggests that the market is now more focused on revenue after the latest result.

There's been no real change to the consensus price target of HK$17.25, with Yue Yuen Industrial (Holdings) seemingly executing in line with expectations. 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. The most optimistic Yue Yuen Industrial (Holdings) analyst has a price target of HK$21.32 per share, while the most pessimistic values it at HK$9.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Yue Yuen Industrial (Holdings) is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.0% annualised growth until the end of 2024. If achieved, this would be a much better result than the 4.5% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.8% annually for the foreseeable future. Although Yue Yuen Industrial (Holdings)'s revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their revenue estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

We have estimates for Yue Yuen Industrial (Holdings) from its 14 analysts out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Yue Yuen Industrial (Holdings) that you need to be mindful 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.