It's been a sad week for Ju Teng International Holdings Limited (HKG:3336), who've watched their investment drop 10% to HK$2.22 in the week since the company reported its yearly result. Sales of HK$10b surpassed estimates by 6.9%, although statutory earnings per share missed badly, coming in 55% below expectations at HK$0.15 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Ju Teng International Holdings after the latest results.
Following the latest results, Ju Teng International Holdings' solitary analyst are now forecasting revenues of HK$10.7b in 2021. This would be an okay 6.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 118% to HK$0.33. Yet prior to the latest earnings, the analyst had been anticipated revenues of HK$9.49b and earnings per share (EPS) of HK$0.29 in 2021. There has definitely been an improvement in perception after these results, with the analyst noticeably increasing both their earnings and revenue estimates.
Althoughthe analyst has upgraded their earnings estimates, there was no change to the consensus price target of HK$3.43, suggesting that the forecast performance does not have a long term impact on the company's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ju Teng International Holdings' past performance and to peers in the same industry. It's clear from the latest estimates that Ju Teng International Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 6.9% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 3.3% 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 17% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Ju Teng International Holdings is expected to grow slower 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 Ju Teng International Holdings' earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target held steady at HK$3.43, with the latest estimates not enough to have an impact on their price target.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Ju Teng International Holdings (at least 1 which can't be ignored) , and understanding these should be part of your investment process.
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