Results: Xinyi Solar Holdings Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

As you might know, Xinyi Solar Holdings Limited (HKG:968) just kicked off its latest yearly results with some very strong numbers. The company beat expectations with revenues of HK$27b arriving 3.2% ahead of forecasts. Statutory earnings per share (EPS) were HK$0.47, 7.9% ahead of estimates. 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 Xinyi Solar Holdings after the latest results.

See our latest analysis for Xinyi Solar Holdings

Taking into account the latest results, the current consensus from Xinyi Solar Holdings' 21 analysts is for revenues of HK$33.4b in 2024. This would reflect a substantial 26% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 26% to HK$0.59. Before this earnings report, the analysts had been forecasting revenues of HK$34.1b and earnings per share (EPS) of HK$0.60 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

It will come as no surprise then, that the consensus price target fell 18% to HK$6.51following these changes. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Xinyi Solar Holdings analyst has a price target of HK$11.50 per share, while the most pessimistic values it at HK$4.26. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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. We can infer from the latest estimates that forecasts expect a continuation of Xinyi Solar Holdings'historical trends, as the 26% annualised revenue growth to the end of 2024 is roughly in line with the 26% 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 13% per year. So it's pretty clear that Xinyi Solar Holdings is forecast to grow substantially faster than its 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. They also downgraded Xinyi Solar Holdings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. 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.

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

It is also worth noting that we have found 2 warning signs for Xinyi Solar Holdings 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.