China Yongda Automobiles Services Holdings Limited Just Missed Earnings - But Analysts Have Updated Their Models

Investors in China Yongda Automobiles Services Holdings Limited (HKG:3669) had a good week, as its shares rose 7.0% to close at HK$1.38 following the release of its half-yearly results. Results overall were not great, with earnings of CN¥0.06 per share falling drastically short of analyst expectations. Meanwhile revenues hit CN¥31b and were slightly better than forecasts. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for China Yongda Automobiles Services Holdings

Taking into account the latest results, China Yongda Automobiles Services Holdings' 17 analysts currently expect revenues in 2024 to be CN¥68.9b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 29% to CN¥0.19. Before this earnings report, the analysts had been forecasting revenues of CN¥71.7b and earnings per share (EPS) of CN¥0.31 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

The consensus price target fell 12% to HK$2.50, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic China Yongda Automobiles Services Holdings analyst has a price target of HK$6.81 per share, while the most pessimistic values it at HK$1.02. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 2.8% growth on an annualised basis. That is in line with its 3.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.7% per year. So it's pretty clear that China Yongda Automobiles Services Holdings is expected to grow slower than similar companies in the same 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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 Yongda Automobiles Services Holdings. 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 Yongda Automobiles Services Holdings going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with China Yongda Automobiles Services Holdings .

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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.