Tongdao Liepin Group Just Missed EPS By 99%: Here's What Analysts Think Will Happen Next

It's been a sad week for Tongdao Liepin Group (HKG:6100), who've watched their investment drop 13% to HK$3.35 in the week since the company reported its yearly result. It looks like a pretty bad result, all things considered. Although revenues of CN¥2.3b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 99% to hit CN¥0.0016 per share. 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 Tongdao Liepin Group after the latest results.

See our latest analysis for Tongdao Liepin Group

Taking into account the latest results, the consensus forecast from Tongdao Liepin Group's six analysts is for revenues of CN¥2.37b in 2024. This reflects a satisfactory 3.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 14,403% to CN¥0.21. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.54b and earnings per share (EPS) of CN¥0.32 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 12% to HK$7.58. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Tongdao Liepin Group, with the most bullish analyst valuing it at HK$10.88 and the most bearish at HK$4.41 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that Tongdao Liepin Group's revenue growth is expected to slow, with the forecast 3.8% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Tongdao Liepin Group.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Tongdao Liepin Group's future valuation.

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. We have estimates - from multiple Tongdao Liepin Group analysts - going 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 3 warning signs for Tongdao Liepin Group 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.