China Feihe Limited (HKG:6186) Just Reported Interim Earnings: Have Analysts Changed Their Mind On The Stock?

China Feihe Limited (HKG:6186) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a credible result overall, with revenues of CN¥12b and statutory earnings per share of CN¥0.82 both in line with analyst estimates, showing that China Feihe is executing in line with expectations. 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 China Feihe

Taking into account the latest results, the most recent consensus for China Feihe from 17 analysts is for revenues of CN¥23.8b in 2021 which, if met, would be a decent 11% increase on its sales over the past 12 months. Statutory earnings per share are forecast to drop 11% to CN¥0.84 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥23.7b and earnings per share (EPS) of CN¥0.83 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$25.98. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on China Feihe, with the most bullish analyst valuing it at HK$30.96 and the most bearish at HK$13.47 per share. 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 China Feihe's past performance and to peers in the same industry. We would highlight that China Feihe's revenue growth is expected to slow, with the forecast 24% annualised growth rate until the end of 2021 being well below the historical 30% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% annually. So it's pretty clear that, while China Feihe's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

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 China Feihe going out to 2023, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for China Feihe 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.
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