Earnings Update: BYD Electronic (International) Company Limited (HKG:285) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

Last week, you might have seen that BYD Electronic (International) Company Limited (HKG:285) released its annual result to the market. The early response was not positive, with shares down 6.0% to HK$28.85 in the past week. The result was positive overall - although revenues of CN¥130b were in line with what the analysts predicted, BYD Electronic (International) surprised by delivering a statutory profit of CN¥1.79 per share, modestly greater than expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for BYD Electronic (International)

Taking into account the latest results, the current consensus from BYD Electronic (International)'s 18 analysts is for revenues of CN¥167.7b in 2024. This would reflect a major 29% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 29% to CN¥2.32. Before this earnings report, the analysts had been forecasting revenues of CN¥177.5b and earnings per share (EPS) of CN¥2.38 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the HK$41.58 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 BYD Electronic (International), with the most bullish analyst valuing it at HK$48.62 and the most bearish at HK$29.88 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that BYD Electronic (International)'s rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 22% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 21% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect BYD Electronic (International) to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for BYD Electronic (International). They also downgraded BYD Electronic (International)'s revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at HK$41.58, 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. We have estimates - from multiple BYD Electronic (International) analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether BYD Electronic (International)'s debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.