Revenue Beat: Lii Hen Industries Bhd Exceeded Revenue Forecasts By 6.2% And Analysts Are Updating Their Estimates

Shareholders might have noticed that Lii Hen Industries Bhd (KLSE:LIIHEN) filed its full-year result this time last week. The early response was not positive, with shares down 7.9% to RM3.74 in the past week. Results overall were respectable, with statutory earnings of RM0.42 per share roughly in line with what the analyst had forecast. Revenues of RM931m came in 6.2% ahead of analyst predictions. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

Check out our latest analysis for Lii Hen Industries Bhd

Taking into account the latest results, Lii Hen Industries Bhd's sole analyst currently expect revenues in 2021 to be RM931.4m, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 5.4% to RM0.40 in the same period. In the lead-up to this report, the analyst had been modelling revenues of RM903.5m and earnings per share (EPS) of RM0.47 in 2021. So it's pretty clear the analyst has mixed opinions on Lii Hen Industries Bhd after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.

The consensus price target fell 16% to RM4.18, suggesting that the analyst are primarily focused on earnings as the driver of value for this business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Lii Hen Industries Bhd's revenue growth is expected to slow, with forecast 0.002% increase next year well below the historical 9.0%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.5% next year. Factoring in the forecast slowdown in growth, it seems obvious that Lii Hen Industries Bhd is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 2022, which can be seen for free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Lii Hen Industries Bhd (including 1 which is a bit unpleasant) .

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