Earnings Update: China Youran Dairy Group Limited (HKG:9858) Just Reported And Analysts Are Trimming Their Forecasts

Shareholders might have noticed that China Youran Dairy Group Limited (HKG:9858) filed its annual result this time last week. The early response was not positive, with shares down 2.4% to HK$1.22 in the past week. Revenues of CN¥19b came in 5.5% below estimates, but statutory losses were well contained with a per-share loss of CN¥0.28 being some 15% smaller than what the analysts were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for China Youran Dairy Group

Taking into account the latest results, the most recent consensus for China Youran Dairy Group from four analysts is for revenues of CN¥20.1b in 2024. If met, it would imply a satisfactory 7.7% increase on its revenue over the past 12 months. Earnings are expected to improve, with China Youran Dairy Group forecast to report a statutory profit of CN¥0.21 per share. In the lead-up to this report, the analysts had been modelling revenues of CN¥23.1b and earnings per share (EPS) of CN¥0.40 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a pretty serious reduction to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.2% to HK$2.10. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values China Youran Dairy Group at HK$2.85 per share, while the most bearish prices it at HK$1.60. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that China Youran Dairy Group's revenue growth is expected to slow, with the forecast 7.7% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.7% annually. Factoring in the forecast slowdown in growth, it looks like China Youran Dairy Group is forecast to grow at about the same rate as the wider 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 China Youran Dairy Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for China Youran Dairy Group going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for China Youran Dairy Group that you need to take into consideration.

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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.