Results: Jinke Smart Services Group Co., Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

Jinke Smart Services Group Co., Ltd. (HKG:9666) last week reported its latest full-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 looks like a credible result overall - although revenues of CN¥3.4b were in line with what the analysts predicted, Jinke Smart Services Group surprised by delivering a statutory profit of CN¥1.24 per share, a notable 17% above expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Jinke Smart Services Group

After the latest results, the nine analysts covering Jinke Smart Services Group are now predicting revenues of CN¥5.48b in 2021. If met, this would reflect a huge 63% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 40% to CN¥1.74. Before this earnings report, the analysts had been forecasting revenues of CN¥5.18b and earnings per share (EPS) of CN¥1.62 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of CN¥72.73, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Jinke Smart Services Group, with the most bullish analyst valuing it at CN¥99.07 and the most bearish at CN¥63.67 per share. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Jinke Smart Services Group's growth to accelerate, with the forecast 63% annualised growth to the end of 2021 ranking favourably alongside historical growth of 32% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Jinke Smart Services Group to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Jinke Smart Services Group's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Jinke Smart Services Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Jinke Smart Services Group going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Jinke Smart Services Group that you should be aware of.

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