China MeiDong Auto Holdings Limited Just Missed EPS By 43%: Here's What Analysts Think Will Happen Next

Last week saw the newest annual earnings release from China MeiDong Auto Holdings Limited (HKG:1268), an important milestone in the company's journey to build a stronger business. It looks like a pretty bad result, all things considered. Although revenues of CN¥29b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 43% to hit CN¥0.10 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for China MeiDong Auto Holdings

After the latest results, the consensus from China MeiDong Auto Holdings' twelve analysts is for revenues of CN¥26.5b in 2024, which would reflect a measurable 7.2% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to shoot up 243% to CN¥0.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥29.9b and earnings per share (EPS) of CN¥0.36 in 2024. Indeed we can see that the consensus opinion has undergone some fundamental changes following the latest results, with a substantial drop in revenues and some minor tweaks to earnings numbers.

The consensus has reconfirmed its price target of HK$5.47, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on China MeiDong Auto Holdings' market value. 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 MeiDong Auto Holdings, with the most bullish analyst valuing it at HK$8.72 and the most bearish at HK$2.98 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China MeiDong Auto Holdings' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 7.2% annualised decline to the end of 2024. That is a notable change from historical growth of 18% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - China MeiDong Auto Holdings is expected to lag the wider industry.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at HK$5.47, with the latest estimates not enough to have an impact on their price targets.

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 MeiDong Auto Holdings going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for China MeiDong Auto Holdings that we have uncovered.

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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.